Netflix sides with muni broadband in quest to upend state laws

As Netflix (NASDAQ: NFLX) prepares to increase the content it's delivering in 4K/UHD, a bandwidth-hungry video format, the subscription video on demand (SVOD) provider promoted, in comments to the FCC, municipal broadband providers' ability to quickly bring U.S. residents up to the Internet capacity necessary to view Ultra HD.

Muni broadband providers "have done the hard work of deploying fiber networks that allow Internet traffic to travel at speeds one hundred times faster than that made available by private sector broadband providers in their areas," Netflix said.

Netflix made its comments in support of petitions by the cities of Chattanooga, Tenn., and Wilson, N.C., which are asking the FCC to preempt state laws that are preventing them from extending their 1 Gbps muni broadband networks to unserved and underserved areas surrounding both cities.

"The Commission can and should take a hard look at state laws that facilitate the efforts of incumbents to artificially constrain broadband availability and capacity," Netflix said in a 10-page filing signed by Christopher Libertelli, VP of global government relations--who heads up lobbying for Netflix in Washington, D.C.--and Corie Wright, director of global public policy and formerly of Free Press.

Netflix added further down in its comments that the Internet "is the ultimate example of interstate commerce."

Currently, 18 states, including North Carolina and Tennessee, either make it difficult or outright prohibit towns and cities from building their own fiber optic networks.

Netflix, of course, has a keen interest in expanding broadband to underserved areas. Better broadband speed and capacity means more subscribers to its Internet-gobbling OTT service. Currently Netflix has more than 50 million subscribers worldwide, 19 million of them in the U.S. But getting a 4K experience requires a broadband connection of 20 Mbps, something many Americans still don't have.

The provider appealed to the government's continuing drive to build out broadband, suggesting that incumbent operators don't care about reaching underserved customers.

"In the cases of Wilson and Chattanooga, they have succeeded in laying infrastructure that can deliver faster speeds than private sector providers and, unlike those providers, are concerned about significant broadband dead zones," Netflix said.

It also pointed out that municipal broadband can check ever-rising subscription prices.

"Prior to the launch of EPB's gigabit broadband service, Comcast (NASDAQ: CMCSA) raised its cable TV rates every year, leading to a 154 percent increase in rates between 1993 and 2008," Netflix said. "After EPB entered the field, the annual rate increases halted and Comcast eventually offered two tiers of service."

For more:
- read the Netflix filing (PDF)

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