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Netflix started to pay one broadband provider (Comcast) to ensure fast and seamless access to its end users. As hinted, other broadband providers (AT&T, Verizon,
- Netflix started to pay one broadband provider (Comcast) to ensure fast and seamless access to its end users. As hinted, other broadband providers (AT&T, Verizon, and Time Warner) will want to extract a similar kind of "toll" from Netflix.
- Does this violate net neutrality (the rule that Internet service providers should treat all data equally, and not charge differentially by user, content, site, etc.)?
- Why or why not?
- Do you favor net neutrality? Explain why.
- As Internet service providers extract more fees from Netflix, the company continues to invest heavily in its proprietary "Open Connect" network, which allows Netflix to connect its servers directly to those of Internet service providers (via peering)
- Since most users upgrade their Internet connections to faster broadband in order to watch video, are the incentives of broadband providers aligned with Netflix, or will the broadband providers continue to extract significant value from this industry?
- Apply a five forces analysis.
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