At the Code Conference yesterday, Netflix CEO Reed Hastings made a rare admission that most other large tech companies won’t: His company doesn’t really need a free, open internet. Net neutrality — the principle that internet-service providers shouldn’t give preferential treatment, like faster transfer speeds, to certain services — is up for debate again, as the Republican-controlled FCC moves to undo that 2015 Open Internet Order, which classified broadband as a utility.
“It’s not our primary battle at this point,” Hastings told interviewer Peter Kafka, noting that they do support the principle through various industry organizations. “I think you’re right that we don’t have the special vulnerability to it.”
Such a forthcoming admission is rare for so-called edge providers — the software and service companies, like Facebook and Google, that dominate the web, and who are generally vocal and explicit supporters of net neutrality. The key difference is that unlike those social-media companies, Netflix does not need to remain as nimble. Net neutrality helps cultivate smaller companies that can grow, and then eventually get gobbled up by Google or Facebook, but Netflix, whose product has remained relatively static for consumers over the past few years, doesn’t rely on that sort of collaborative environment as heavily.
The fact is that Facebook and Google — and Microsoft, and Amazon, and Apple, and any other enormous tech company with billions in market cap — is the same way. They can afford to pay cable companies to accommodate their substantial bandwidth concerns; they’d just prefer not to. For smaller companies, net neutrality is actually an existential threat. For dominant companies like Netflix, it’s a minor inconvenience. Hastings said that the issue was “not narrowly important to us because we’re big enough to get the deals we want.”
The problem is that the argument for net neutrality becomes a lot more forceful when the companies with the most economic muscle get behind it. One public statement from a Facebook- or Netflix-type company is worth a thousand from smaller edge providers.
“We had to carry the water when we were growing up and we were small,” Hastings told the conference, “and now other companies need to be on that leading edge.” If other companies adopt the same stance, net neutrality has little chance of surviving, and an even smaller chance of being resurrected.