Where Were Netflix and Google in the Net-Neutrality Fight?

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Where Were Netflix and Google in the Net-Neutrality Fight?


The most recent chapter in the debate over net neutrality has been, like previous chapters, cacophonous. One notable difference this time around, though, was the relative quiet of many large tech companies. In previous years, these firms had been outspoken about the issue. What changed?

Netflix’s net-neutrality journey is an illuminating example. In 2014, Reed Hastings, the company’s CEO, issued a strongly worded warning about oppressive “internet tolls” that could threaten the web’s status as a “platform for progress.” His company had recently tussled with Comcast (ultimately agreeing to pay the cable company to get data for its streaming videos to customers smoothly) and Hastings felt a need to take a stand in favor of net neutrality. In advance of a 2015 Federal Communications Commission vote on the issue that went as Netflix hoped, the company’s representatives reportedly contacted or visited FCC officials more than a dozen times.

In the time between then and last week—when the FCC voted to undo its 2015 regulations—something, apparently, had changed. “We think net neutrality is incredibly important,” Hastings said at a tech conference in late May, but went on to say that it’s “not narrowly important to us because we’re big enough to get the deals we want.” The “deals” he was referring to are the ones theoretically opened up by the repeal of net neutrality—they’re the fees that internet-service providers (like Comcast) could ask for from, well, just about anyone (like Netflix), in exchange for speeding their data along. Netflix did submit two filings to the FCC in the run-up to last week’s vote, but the commission didn’t have any record of lobbying visits on the company’s behalf during that time, according to Bloomberg.

What about that platform for progress? The reality is that Netflix and other large tech companies, such as Facebook and Google, have grown so dominant that net neutrality has become a nonissue for them. They’re aware that their extensive, loyal user bases can protect them from any unfavorable deals that internet-service providers (ISPs) might devise—there’s leverage to be gained from becoming a platform that broadband customers expect ready access to. And unlike smaller businesses, which lack that leverage, big tech companies have the political clout to fight policies they don’t want—should they choose to.

Basically, these companies are aware of how much they’ve grown. When Netflix’s CEO was complaining about “internet tolls” in 2014, the company’s annual revenues were $5.5 billion; just three years later, they’re estimated to be more than twice that. “From [these companies’] standpoint, it doesn’t really matter who’s enforcing net neutrality, or if there’s net neutrality at all—they don’t need it,” Larry Downes, a project director at Georgetown University’s Center for Business and Public Policy, told me. “They have all the leverage they need to make sure their content gets delivered as best it can be.”

Because of that, Downes says, they didn’t see the need to put up much of a fight this time. “You’ll have noted that their voices were extremely muted during this whole proceeding,” Downes says. “They said very little themselves. They didn’t even say that much through their trade associations.”

To be sure, tech companies did voice their displeasure with the outcome of last week’s vote. Amazon’s CTO tweeted that he was “extremely disappointed.” Sheryl Sandberg, Facebook’s chief operating officer, said the decision was “disappointing and harmful.” Microsoft’s chief legal officer tweeted that repealing net neutrality will hurt “consumers, business & the entire economy.”

Of the tech companies named in this article, only Netflix and Google provided responses to a request for comment. “We’ve actually been pretty vocal,” said Bao-Viet Nguyen, a Netflix spokesperson, pointing to pro–net-neutrality tweets sent out from the company’s account and the public comments it filed with the FCC. Nguyen added, “Although there are other companies for whom this is a bigger business issue today, we continue to support net neutrality protections so that the next Netflix has a fair shot.” And Scott Haber, a spokesperson for the Internet Association, a trade group that represents Facebook, Google, and Amazon (as well as a number of other big tech companies), said that the organization had “been incredibly active on behalf of our members” in trying to preserve net neutrality, issuing statements and publishing white papers on the subject.

Still, it is one thing to put out tweets and press releases, and quite another to be dogging the FCC for months about an upcoming vote. One reading of those post–FCC-vote laments from tech executives is that these companies see public-relations value in associating themselves with egalitarian digital ideals; another is that they are well aware that their employees care deeply about net neutrality as a political issue, even if it doesn’t threaten any bottom lines.

Indeed, when I asked Larry Downes how big tech firms might recalibrate their business strategies after last week’s vote, he warned me, “This is going to be very boring.” Ryan Singel, a fellow at Stanford Law School’s Center for Internet and Society and a former reporter at Wired, agrees that it’s hard to imagine the Googles and Facebooks of the world doing things differently after net neutrality’s repeal. “These guys can afford to pay for fast lanes”—the priority treatment that ISPs will soon be permitted to charge for—“they can afford to pay access fees, they have the clout to make sure that when they do pay for those, that they get a better rate than someone else,” Singel says. He remembers when, roughly a decade ago, Google strongly advocated for having net-neutrality–like rules govern the FCC’s auction of a newly available segment of the radio spectrum. This time around, he says, “Google was nowhere near the level of fight they put up in 2008, 2009, 2010.” (For Google’s part, a company spokesperson told me that it “remain[s] committed” to net neutrality and “will work with other net neutrality supporters large and small to promote strong, enforceable protections.”)

One thing that last week’s repeal could change, though, is the market for distributing content. These two markets have each become heavily consolidated—in both cases, a small number of large companies dominate—and there’s a concern that lifting net-neutrality protections would only speed up this process. Matt Stoller, a fellow at the Open Markets Institute, an antitrust research group, says that he expects last week’s vote to “accelerate the contest for the last monopoly standing,” because it enables ISPs to push for deals that large tech and media companies are best positioned to enter into. “There will still be competition,” he added, “but it will be competition among the telecom and big tech platforms over who controls access to customers and monopoly power.”

And because the repeal of net neutrality increases the upsides of being big, Stoller says, more companies will try to get bigger, which could speed up the race for lucrative business deals at the expense of product innovation. This is the race that led AT&T (a content-distribution company) to want to buy Time Warner (a content company) and Verizon (a content-distribution company) to want to buy Yahoo and AOL (both content companies). Stoller says he expects that last week’s vote will prompt similar companies to consider such deals of their own—perhaps a tech platform would even think about buying a telecom.

When it comes to large companies gaining power, the flip-side concern is about smaller companies losing it. Net neutrality’s proponents fear, among other things, that an internet with “fast lanes” will squeeze out smaller firms that don’t have the funds or negotiating power that large tech companies can use to push back against ISPs. “It’s the smaller retailers … that are going to feel more of that pain,” says Singel, adding, “Openness is the tool of insurgents.” Indeed, it was smaller companies that were most vocal leading up to last week’s vote, which makes sense: Some of yesterday’s voluble insurgents are today’s quiet behemoths.





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