Will Obama Rescue Netflix After Congress Rejects Net Neutrality?

Tyler Durden's picture

Back in December, the FCC decided, in a 3-2 vote, to take it upon itself to regulate broadband internet access, also known as "Net Neutrality" - in other words the FCC essentially decided to give itself the authority to impose rules that bar Internet providers from blocking or "unreasonably
discriminating" against Web content, services or applications. As previously explained: "That means Time Warner Cable can't take payments from Google to make
YouTube come over the network faster than Hulu. Comcast, [which recently bought 51% of NBC-U], is also forbidden from favoring its own content
over others'."  The biggest winners were broadband video content distributors who have rapidly become the biggest traffic hogs on the Internet. Names such as Netflix come to mind. So it came as a bit of a shocker that late this afternoon, while everyone was staring at the countdown clock to government shutdown, that House republicans, in a 240-179 vote, "pushed through a
measure disapproving the Federal Communications Commission's
rules" - in other words rejecting Net Neutrality, and throwing broadband video companies for a loop. Since the triple play companies such as Comcast have become increasingly concerned about the encroaching threat that is Netflix, it is almost guaranteed that if indeed the House vote passes the Senate, where a similar measure has 39 co-sponsors, and becomes law, then Netflix already razor thing cash flow margins are about to get "razor thinner" as the triple plays extract their pound of flesh. There is one out, though: an Obama veto: per Reuters, "
the White House said on Monday that
President Barack Obama's advisers would recommend that he veto
any such resolution."
Which begs the question: will Netflix' momo longs have Obama to thank for the continuation of the most ridiculous move in stock market history, or will the fairy tale promptly come to an end.

From Reuters:

The FCC's rules, approved in late December, banned Internet service providers from blocking traffic on their networks, while allowing providers -- such as Verizon, Comcast Corp (CMCSA.O) and AT&T Inc (T.N) -- to "reasonably" manage their networks and charge consumers based on usage.

Republicans argued in House debate that the FCC's rules needlessly impose government regulation on the Internet.

"The FCC has never had the authority to regulate the Internet," said Republican Representative Cliff Stearns.

House Republican Leader Eric Cantor called the House's vote "an important step to bring down the FCC's harmful and partisan plan to regulate the Internet."

Democrats argue that the FCC rules are needed to curb the growing market power of large service providers.

Disapproving the FCC rules "would give big phone and cable companies control over what websites Americans can visit, what applications they can run, and what devices they can use," said Democratic Representative Henry Waxman.

Democratic Representative Anna Eshoo called the Republican push against the FCC's rules "an ideological assault on a federal agency and its ability to provide basic consumer protections."

While we don't want to handicap the outcome, we are confident that if Netflix' workforce was at least slightly more unionized that while Netflix creditors' may have to be worried, equity could surely sleep soundly, known Obama has their back (in an inverse case of Bernanke "having" the middle class' back).

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LowProfile's picture

It will be vetoed.

The circuses must continue.

rocker's picture

I may be wrong here, but it seems to me that Tyler should have said in a 3-2 vote to Deregulate Internet access.

Another words, not allowing someone else to regulate what we see.  

sun tzu's picture

The government regulates. Private companies sell their products to those who wish to buy. Private companies cannot regulate.

pan-the-ist's picture

Monopolies limit competition.  These companies have local monopolies on broadband and cannot be allowed to control content.  It is that easy.

Go back to sleep free-marketeer.

trav7777's picture

concur..and you know who subsidized all that fiber buildout?  WE DID.

WE (in the form of our local gov'ts) provided easements for these wires as a public benefit so that shitty companies like Comcast can strangle inexpensive providers out of business?  WTF, have you seen how much an on-demand movie costs?  Fkin FIOS seemed to want like $8!  PSN wants like $3 or 4...no wonder they're so pissed at Redbox.

Most of these movies aren't worth more than a fuckin dollar.

malikai's picture

I'd be very surprised if "net neutrality" got stopped. There's too much google money in DC. And I'd reckon there's too much DC money in google and netflix, as well.

ThisIsBob's picture



There is also a fucking incompetent in the White House.

masterinchancery's picture

Net neutrality is simply theft.  Netflix et al want to use someone else's property, rather than build their own network, and also dictate the terms.

Zro's picture

Netflix pays for its use on the ISPs infrastructure (e.g. bandwidth). How is that theft?

Bearster's picture

Last I checked, it is theft if you force someone to give you what he doesn't want to give you, or at a price he does not want to give it to you at.

Should we impose "search neutrality" on Google, by force?  How about book neutrality on Amazon?  Video neutrality on Netflix?

So-called "neutrality" is just rent-seeking by the upstream content providers, who would love to force the downstream access providers to offer pricing plans that those access providers do not want to offer.  The same principle could be applied to content providers and other aggregators and distributors of Internet stuff, including all of the proponents of "network neutrality".

wisefool's picture

Google has some really smart people. But thankfully they are about 10 I.Q. points lower than everybody who is sitting down at the table with Hugh Hefner, Obama and Mark Zuckerburg.


I want the faux nerds at google to fight the net nutrality fight. But those dudes have already gone Travolta and Silly Valley.

Dr. Kenneth Noisewater's picture

So how about the theft ILECs and incumbent ISPs do with government monopoly/oligopoly sanction?  States and localities grant monopolies to cable providers for their area, so the business model of TWC, Comcast, et al. is intimately intertwined with grafting off of those governments.  Which localities in the US have an open public network policy, in which any market participant has free and equal rights to run fiber or cable on public rights of way instead of having to go thru a corrupt public regulator?


When there's a free market for end-user connectivity such that anyone with capital and a business plan may lay fiber and connect to homes with a reasonable and nondiscriminatory set of standards (no damaging competitor lines, no undue disruption of public rights-of-way, adequately cover any cuts to public roads or property), THEN you can whine about net neutrality.  Until then, if you take the Nomenklatura's shilling, you do as the Nomenklatura demand.

gringo28's picture

Netflix et. al. are simply piggybacking on the creators of content. They produce nothing and create nothing. They are reselling parasites who eat away at what would otherwise be given back to shareholders and CAPEX to improve transmission. Do you really want worse internet service because the morons next door HAVE to stream Stupid Human videos on Youtube next door 24/7? Net Neutrality is code for rent stabilization etc. Imagine if gov't told you as landlord that you couldn't charge more for a higher end store, despite commanding better market rents? This is what 'net neutrality' does in effect. The whole point is to pay for better service rather than subsidizing those who can't afford it. And yeah, I am saying fuck those who can't afford it.


pan-the-ist's picture

Industry sock-puppet that gets paid per post.

Ahmeexnal's picture

Anybody using the internet is using Al Gore's property. He invented the internet.

1fortheroad's picture

  1. He did not,That is a big lie.

EvlTheCat's picture

I think that was the big fat point!!

wisefool's picture

Agreed. Al Gore did not invent the internet. But a 27 year old kid named Mark Zuckerburg is going to be the force behind energy efficient computing. Also, linclon freed the slaves with but a word. Paulson saved the financial system from ruin.

And most importantly Barry Bonds had sex with wilt chamberlain while Benjamin Bernanke turned the printing press up.

Frued is thankful for the student loans to his honor.

Husk-Erzulie's picture

Albert Gore is nearly as brilliant as Barack Obama.  It's a good thing we have such statesmen among us today.  God bless them.

Popo's picture

>"Net neutrality is simply theft"


Absolutely not.  Understand that YOU pay a bill for the use of the Internet.   When you use Google, it is not Google that is transmitting for 'free' over the Internet.   Google is responding to an http **REQUEST** which you have initiated.  That request is something that you pay for the ability to perform.   Google's supposed "transmission" over the Internet is a response to that request.  

Internet backbone providers are attempting to double bill for this communication, and charge *both* parties.

Net neutrality is absolutely *not* theft.   The parties attempting to bill it as such are attempting to squeeze more profits from a system that already generates profits. 



rocker's picture

A+   Greed knows no limit. Anyone trying to control more of anything have money and monopoly written all over them.

It is like saying we trust CNBC for all our financial news if Comcast says theirs is the only one we should see.

Besides, taxpayers have actually paid for part of the infrastructure. Now some want to let them control what we see.

Another simply point, Republicans always take the side of big business, that in itself should be a warning to the end user.  Do you want competition or a open market.  Even ZH should have concerns if anybody gets control over any media.

gringo28's picture

you are paranoid. allowing the owners of the transmission lines to charge more for better service is not a freedom of speech issue. it's not even close and the fact is cable companies have enough problems in front of them. have you used cable lately in the early evening hours when the Moron Family comes home to stream TMZ and the Stupid Human series on youtube? It's a crawl because the pipes are clogged. The future is wi-max and it will be deep and wide. Competition will take care of shoddy service and bad pricing but putting a bunch of DC hacks in charge of picking winners is about as smart as sticking a lit match in your ear.

rocker's picture

Paranoid vs. Reality. When cable started I was a linesman who hung cable and did installs when this all started around the 1970's. Back then we, (small cable companies), hung the strand, wrapped the cable and installed transformers for as little as 25/50 homes miles away from a main feed. All this was done and the company made a profit for a grand total of $4.95 a month for basic service. So don't ask me to pity them now. As a matter of fact, I refuse to use cable because I know they are raping consumers. Worst yet, the share holders don't even profit from their greed. Even though DTV is becoming a rip off, I'd rather hand them my money then get shitty service from Comcast or the like. At least it is all digital, unlike cable. No snowy, grainy pictures, called noise in the lines, by those who know. PS: I have DTV since it started and will never go back while I watch my neighbors always changing back and forth until they go DTV. PSII: Dish brand sucks too. And no, I do not work for DTV or get any kickbacks in any way. My only upgrade: Tivo. So cool with DTV.  


sun tzu's picture

Fine it's not theft, but the service providers will start to charge end users by megabits. Let's see the FCC stop them from doing that. Anyone who uses Netflix to download movies will be socked by usage charges. 

pan-the-ist's picture

What's your point again?

velobabe's picture

damn tyler you are on T O P , every time ;-]

disabledvet's picture

why don't more talk the way you do?

JonTurk's picture

I really cannot understand why the stupid yanks pay money to watch movies on internet!!  dude, everything is free on the net, all it takes is a good bandwith to download.

joe sixpack is really a dumbass and deserves his misery.

LowProfile's picture

By the time you get done paying for Usenet + your ISP, you're spending more than you would with Netflix + ISP, and you do it with a lot less fucking around (and a great interface to suggest titles you may never have heard of otherwise).

And some of us actually don't mind flipping the artist a few coins.  You strike me as the guy who stops his kid from dropping two bits into the juggler's hat.  Too bad for you, that must suck.

Also, Usenet will be next up on the chopping block IMO...  Enjoy it while you can.

rich_wicks's picture

By the time you get done paying for Usenet + your ISP, you're spending more than you would with Netflix + ISP

bit torrent.

Usenet - who the heck would pay somebody so they can pirate a file?  Americans crack me up, and I'm an American.  An American in Silicon Valley sure, but it's pretty amazing how Americans don't seem to know anything about the Internet, which was invented in the United States and mostly developed there as well.

sun tzu's picture

So you think stealing intellectual property is ok? Should the artist that created the movie or video be allowed to profit from his/her time and efforts?

rich_wicks's picture

So you think stealing intellectual property is ok?

No, I'm saying it's not even worth while to steal intellectual property.

I was bored with television 20 years ago and turned it off.  Films by and large are a complete waste of time and are designed for children not adults.  Ever notice that you rarely see anybody that is 50 years old in a movie theater?  You'll get to that point too.  After 30 years of being alive, you'll start to realize that everything you're seeing, you've already seen before.

Then what is left?  Non fiction suddenly becomes interesting for a while - I don't know how long that will last for me.

nah's picture

the net work is sub sidized r and d US taxpayer dollars


the consumers that use the regional monopolys services pay a fee for the pipe bandwidth


video services are a product people want to use this product for 'bandwidth'


so are we purchasing bandwidth ports pipes and technology as consumers


or just servicing publicly funded regional monopoly media outlets


who owns the bandwidth me or government backed monopolys

VisualCSharp's picture

Oh my Lord. Please do ZH a favor learn to write coherently.

NOTW777's picture

how much did they give in campaign contributions

Cole Younger's picture

When the FCC, or any agency for that matter adopts rules that take the politics (campaign fund raising) out of the frey, Congress will surely get upset about it. Net neutrality and its opposition must be worth a few million for congress's votes.

JohnG's picture

It is always, and has always been, about the money.

It's just that simple.

sun tzu's picture

Except that those unelected bureaucrats do not have the right to create laws, or else they become little dictators and tyrants. As bad as congress is, it is better than living under totalitarianism.

magpie's picture

This throws me back into the bad old days of 2009, when a single word of the President would turn the market down.

Troublehoff's picture

I really cant understand what all you guys above and the Dems/Repubs are arguing about?


The current formula for the internet is perfect and the less government meddling and legislation the better. The architects of the web had the right idea. i.e every packet of data should be treated with equal priority - end of story.

We don't need to build another pyramid of bureaucracy on top of this thriving and free network of communication.


If we had more transparency, less legislation and more unfettered freedom in other systems, the World would be a fairer, more efficient place for everyone involved

if somebody pays for 20GB per month, or 10Bbit/s connection contractually then that's what they should get - we don't need more lawyers and politicos leaching off the baby of engineers and architects, who are truly the builders of our world


let the fucking scumbag, scientificaly bereft, talking heads go and start their own ghetto where nothing is done or logically reasoned about, no deep thought occurs, and see how they get on


Fuck them 


Broker NotBroke's picture

You realize that net neutrality = less transparency, more legislation, and less freedom right?

Not having net neutrality means that every packet of data is NOT treated with equal priority.

What are you arguing for or against?

Troublehoff's picture

I'm arguing against exactly the kind of obfuscation and double-talk that you talk of (i.e. net neutrality being exactly the opposite)

I'd always assumed that the Repubs were the evil ones having watched the Simpsons as a kid and worshiped the satire but now realise that the Dems are actually worse.

I'm not saying I like the repubs here either..


I just want them to leave something alone for once



EvlTheCat's picture

They are all evil. Period. If you are at all aware of what is going on, all one has to do is look at the current legislation put forth to knock out streaming video vs. torrents.  Money and power talks.

You may want to worry more about the Democraps at this point..