Netflix Rails Against Per Gigabyte Charging ISPs

Echoing the thoughts of many consumers that are disgruntled with expensive service providers

Netflix knows what is at stake here. After recent studies showing the company was responsible for over 20% of all internet traffic in the United States, bandwidth issues have become a top concern for the premier movie rental service.

In it’s most recent financial report, Netflix blatantly stated that ISPs aiming for pay-per-gigabyte fees were doing so purely to line their pockets with gold:

An independent negative issue for Netflix and other Internet video providers would be a move by wired ISPs to shift consumers to pay-per-gigabyte models instead of the current unlimited-up-to-a-large-cap approach. We hope this doesn’t happen, and will do what we can to promote the unlimited-up-to-alarge-cap model. Wired ISPs have large fixed costs of building and maintaining their last mile network of residential cable and fiber. The ISPs’ costs, however, to deliver a marginal gigabyte, which is about an hour of viewing, from one of our regional interchange points over their last mile wired network to the consumer is less than a penny, and falling, so there is no reason that pay-per-gigabyte is economically necessary. Moreover, at $1 per gigabyte over wired networks, it would be grossly overpriced.

The reports comes in the wake of Canada’s most recent issue with the CRTC allowing Bell Canada to implement this exact type of pricing policy.

Fight the good fight Netflix.

Netflix Financial Report (PDF)