Netflix brings net neutrality concerns to FCC officials

By Alina Selyukh

WASHINGTON (Reuters) - After weeks of public outcry, Netflix Inc brought its concerns about Internet neutrality directly to U.S. regulators this week in meetings with Federal Communications Commission staff, according to sources familiar with the matter.

The video streaming company has been outspoken in its push to do away with fees that content companies pay Internet service providers to deliver their video and other data to consumers.

Netflix recently agreed to pay such fees to Comcast Corp and Verizon Communications Inc to ensure smooth delivery of its videos, but it argues they weaken the principle of net neutrality, which says all Internet traffic should be treated equally.

Netflix's representatives brought that message to the FCC commissioners' offices in meeting with advisers over the course of several days this week, the sources said, as the agency prepares to rewrite so-called Open Internet rules that regulate net neutrality by setting limits to how Internet providers treat web traffic crossing their networks.

The sources spoke anonymously because the meetings have not been publicly revealed yet.

FCC Chairman Tom Wheeler has drafted rules that would soften the agency's stance on pay-for-priority to comply with a court rejection of earlier rules. If his proposal is adopted, the FCC would allow some "commercially reasonable" deals where content companies can pay Internet providers to give priority to their traffic and ensure its smooth delivery to users.

Though Wheeler has since said he would not tolerate moves to "degrade the service for all for the benefit of a few," public interest groups and the Web community at large worry that the rules may create "fast lanes" for those who pay up.

"Tolls coming for the Web thanks to FCC. What is the FCC thinking?" Netflix Chief Executive Reed Hastings posted on his Facebook page last week when the news of the proposal leaked out.

In a blog post on March 20, Hastings took a sharp stance against allowing Internet providers to charge fees for connections, including in deals known as "interconnection" or "peering" agreements that have traditionally been outside the scope of net neutrality as regulated by the FCC.

A Netflix spokesman had no comment on Thursday.

The FCC is expected to vote on May 15 to formally propose Wheeler's rules, and at a cable industry trade show in Los Angeles on Thursday, FCC commissioners said they are taking seriously the responses to the agency's proposals.

"We are going to have to take all that public commentary and take a hard look at it, take a hard look at the chairman's proposal and what the perception of that proposal is, and then also consider the admittedly difficult legal environment we are in and try to find a way forward," said Jessica Rosenworcel, one of the FCC's commissioners.

Netflix has been the most outspoken of major U.S. Internet companies on the issue of net neutrality so far.

The Internet Association, which represents many of those companies, including Netflix and Google Inc, has expressed concerns about "allowing broadband gatekeepers to decide what websites run the fastest." But the group, which is expected to be briefed on the proposal at the FCC on Friday, has been measured in opposition until the proposal's details are made public.

Netflix's push on net neutrality has been paired with its opposition to Comcast's current bid to buy No. 2 cable company Time Warner Cable Inc, as Netflix urges the FCC to impose "some enduring form of no-fee interconnect.

(Reporting by Alina Selyukh; Additional reporting by Lisa Richwine in Los Angeles; Esditing by Steve Orlofsky)

[Image via Agence France-Presse]