(Adds comment from Comcast)
By Diane Bartz
WASHINGTON, April 24 Netflix Inc, which
opposes the proposed Comcast deal to buy rival Time Warner Cable
Inc, outlined on Thursday the ways it thinks competition will be
hurt if the merger goes ahead, most notably in the extraction of
The popular video streaming service responded in a letter to
Senator Al Franken, a vocal critic of the deal, saying a
combined Comcast Corp and TWC, would mean
video providers would pay more to get their movies and
television shows into viewers' living rooms.
"Comcast is limiting the capacity of connections between its
network and other networks, unless the network agrees to pay
Comcast for access," Netflix Vice President Christopher
Libertelli wrote in the letter to Franken, a Minnesota Democrat.
"Consumers experience these delays as slow page loads, poor
streaming quality, and frequent streaming pauses," Libertelli
wrote in the letter released by the senator's office.
In a response, Comcast accused Netflix of trying to shift
the costs of its bandwidth-heavy business onto all Internet
users rather than just Netflix users, and said it has many
agreements similar to the one with Netflix.
"Those agreements have not harmed consumers or increased
costs for content providers. If anything, they have decreased
the costs those providers would have paid to others," said
Jennifer Khoury, a Comcast spokeswoman.
Comcast, the No. 1 U.S. cable company that also owns NBC
Universal, said in February it would buy rival cable and
broadband provider Time Warner Cable, angering consumer groups
who fear the pricing power of the combined entity.
Franken soon joined the criticism, and Netflix came out in
opposition to the deal on Monday.
Netflix made a similar point in a blog post on Thursday.
"We're very concerned that a combined Comcast-TWC will place
toll taking above consumer interests," wrote Ken Florence, vice
president of content delivery at Netflix. "Comcast is double
dipping by getting both its subscribers and Internet content
providers to pay for access to each other."
Netflix streaming accounts for nearly one-third of all
Internet traffic in North America during peak times, according
to research by broadband networking equipment company Sandvine
Comcast has defended the merger by saying that the two
companies do not directly compete in any market, meaning no
consumer would lose a choice of an Internet or cable provider.
A Senate panel has already met to consider the merits of the
deal. The House of Representatives Judiciary Committee will hold
a hearing on the issue on May 8.
(Reporting by Diane Bartz and Lisa Richwine; Editing by Ros
Krasny, Sandra Maler and Andre Grenon)