AT&T deems Netflix call for free interconnection arrogant

One day after Netflix CEO Reed Hastings shared the company’s opinion that broadband companies should not violate the principle of net neutrality and called for free interconnection, particularly citing Comcast, AT&T retaliated against Netflix, calling the proposition of the content providers CEO arrogant.

Netflix CEO Reed Hastings said in a blogpost on Thursday: “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.”

This comes after the film and TV streaming service provider “had few options than to agree to a deal with Comcast” to pay an undisclosed fee for interconnection, a faster online delivery of its moves and TV shows, following customer complaints about slow service. Hastings called for net neutrality, which requires ISPs (Internet service providers) to provide consumers with equal access to all lawful content without restrictions.

Comcast’s Executive Vice-President – Mr. David Cohen almost immediately responded to Netflix’s 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.”

On Friday, Jim Cicconi, who heads AT&Ts public policy team, dismissed Hastingss argues as arrogant, saying there was “no free lunch”. He said that the increasing popularity of movie and TV streaming was driving consumer bandwidth consumption to record high levels, whose sustainment requires additional investments in capacity.

Mr.Hastings said that Internet service providers should provide content companies, such as Netflix, with adequate network connections for free. According to Hastings view ISPs would be burdened to pay for the increase in capacity that is required to provide Netflixs customers with the high quality service the content companies wants to ensure, Mr.Cicconi said.

“Mr Hastings’ arrogant proposition is that everyone else should pay but Netflix. That may be a nice deal if he can get it. But it’s not how the internet, or telecommunication for that matter, has ever worked,” Mr. Cicconi said. “If theres a cost of delivering Mr. Hastingss movies at the quality level he desires – and there is – then it should be borne by Netflix and recovered in the price of its service,” he added.

AT&T Inc jumped by 0.62% on Friday in New York to close the session at $34.30 per share, marking a one-year change of -5.12%. The company is valued at $178.59 billion. According to CNN Money, the 24 analysts offering 12-month price forecasts for AT&T Inc have a median target of $35.50, with a high estimate of $42.00 and a low estimate of $25.00. The median estimate represents a +3.50% increase from the last price of $34.30.

Netflix Inc lost 4.31% yesterday and settled at $405.99 a share, marking a one-year change of +123.08%. The content provider has a market capitalization of $24.28 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 -0.24% decrease from the last price of $405.99.