Comcast, Netflix deny report that cable giant forced SVOD service to expand deal with paid prioritization threat

Netflix, Youtube
Last week, Comcast and Netflix announced the expansion of the SVOD service’s integration into the cable operator’s X1 video platform. (iStock/wutwhanfoto)

Comcast and Netflix representatives stridently denied a Digital Music News report that the cable company used threats of paid prioritization charges to push Netflix into expanding the pair’s integration deal.

A Comcast representative said yesterday’s report was completely inaccurate. “These assertions are completely false and have no basis in fact," a Comcast statement read. Netflix released a statement saying, “These claims are entirely false.”

Last week, Comcast and Netflix announced the expansion of the SVOD service’s integration into the cable operator’s X1 video platform. Under the new agreement, Comcast will bundle, sell and bill for Netflix. Controlling the bill is often seen as a coveted asset in these negotiations. 

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According to Digital Music News, which quoted anonymous sources, Comcast “has already started threatening heavy access fees against Netflix. That includes threats—both implicit and ‘verbally explicit’—of punishingly high access charges or outright throttling if Netflix didn’t concede to deal terms highly advantageous to Comcast.”

The site said the billing arrangement was something Netflix didn’t want to release. 

“But the on-demand platform has been forced to concede—or face seriously-elevated access charges,” Digital Music News reported. “Those increased charges would take the form of dramatically-increased ‘paid prioritization’ surcharges to reach Netflix’s exiting 55 million subscriber base, or forced throttling against Netflix if the platform refused to play ball.”

RELATED: Comcast expands Netflix deal, will package, sell and bill for SVOD service

In December, the now Republican-led FCC voted to roll back Title II internet regulations that prohibited throttling and paid prioritization of traffic over their networks. Comcast was one of the leading lobbying forces behind that deregulation. 

Late last month, Comcast’s top regulatory executive, David L. Cohen, suggested a ban on paid prioritization save for “limited exceptions.” 

"How about if we agree to a prohibition on paid prioritization and we have a limited exception created in some way for this concept of specialized services," Cohen said on a panel at the Free State Foundation's Telecom Policy Conference earlier this week. (C-SPAN has a video of his appearance on its website.)

RELATED: Comcast’s Cohen seeks ban on paid prioritization with ‘limited exception’

Cohen wasn’t clear on what kinds of services he was talking about.

"There is a recognition that something might come along that is not anticompetitive, that is pro-consumer, that is a specialized service available not to every user of the internet, [and] that would be in consumers' interests and in the public interest,” he explained.

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