Monday 22 December 2014

Netflix admits paying for internet 'fast lane' for its customers

Published 22/08/2014 | 02:30

Netflix

The movie-streaming giant Netflix has admitted paying cable operators for faster customer access to its service.

It comes as a debate over whether telecoms firms should be allowed to charge internet companies extra for customers' high-speed access continues to intensify.

The internet company, which has more than 200,000 Irish subscribers, says that it increasingly has no choice but to pay top internet providers for smooth customer access to its movie services.

Its latest deal with US cable firm Time Warner brings to four the number of internet service providers that Netflix has had to pay for fast streaming of its online video services.

But Irish telecom operators say that efforts to make internet companies such as Facebook, Google and Netflix pay more is justified.

"Many of these companies are making billions in profits, largely leveraged off investment we put in to make sure people can use their services," said one senior Irish executive. "They're getting a free ride. Every time they introduce a new money-making service, we take the strain and have to pay more in infrastructure costs."

Internet firms and telecoms providers are increasingly at odds over who should pay for the surge in data traffic.

Existing industry rules, known as net neutrality, stipulate that telecoms firms are not allowed to charge companies such as Facebook for the spike in traffic that internet companies cause.

Earlier this year, the European Parliament voted to enhance these rules in a bid to protect startups and other internet businesses from getting caught in a two-tier web.

"The principle of net neutrality means that traffic should be treated equally, without discrimination, restriction or interference, independent of the sender, receiver, type, content, device, service or application," says the proposed regulation.

The proposed law must now pass the European Council of Ministers to be approved.

Irish Independent

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