Netflix Inc share price up, calls for free interconnection between broadband providers

The Chief Executive Officer of Netflix Inc. – Reed Hastings shared the companys opinion that broadband companies should be required to connect their networks to major content providers such as Netflix itself. The company also attacked some large internet providers such as Comcast, saying they use their “market position” in order to impose fees for access to their networks.

Netflix CEO Reed Hastingss words, written in a blog post, were cited by Bloomberg: “Without strong net neutrality, big ISPs can demand potentially escalating fees for the interconnection required to deliver high quality service. The big ISPs can make these demands – driving up costs and prices for everyone else – because of their market position.”

Comcast, which is the biggest cable operator in the U.S., and Netflix signed a contract in February this year. According to the deals terms, the streaming film and television services of Netflix will be connected with the internet network of Comcast, for which Netflix Inc. will pay an undisclosed fee for the “interconnection”.

Mr. Hastings also shared: “Comcast has been an industry leader in supporting weak net neutrality, and we hope theyll support strong net neutrality as well.” The Chief Executive Officer of Netflix explained that terminating the fees and supporting framed peering are crucial to the principle of net neutrality.

As reported by the Wall Street Journal, he wrote: “Netflix believes strong net neutrality is critical, but in the near term we will in cases pay the toll to the powerful ISPs to protect our consumer experience.”

The discussion between Netflix and Comcast seems to be heating up due to the fact it comes at a sensitive time for the company, which is preparing for a regulatory scrutiny.

As reported by the Financial Times, Comcasts Executive Vice-President – Mr. David Cohen almost immediately responded to Netflixs blog post, saying: “No company has had a stronger commitment to the open internet than Comcast. Providers like Netflix have always paid for their interconnection to the internet and have always had ample options to ensure that their customers receive an optimal performance through all ISPs at a fair price.”

Netflix Inc. rose by 1.00% on Thursday to close the session at $424.27, marking a one-year change of +133.13%. The company is valued at $25.37 billion. According to CNN Money, the 27 analysts offering 12-month price forecasts for Netflix Inc. have a median target of $405.00, with a high estimate of $525.00 and a low estimate of $175.00. The median estimate represents a -4.54% decrease from the last price.