Los Gatos, Calif. – Netflix Inc. revealed on Thursday that it has been secretly slowing down video streams for mobile customers on Verizon and AT&T for more than five years. Known as throttling, this process has been keeping those users from exceeding their caps on their data plans, according to a Wall Street Journal report.
PC World reported that John Legere, T-Mobile CEO, last week said that his carrier provided better streams for Netflix subscribers. That comment led Netflix to admit it was throttling streams for T-Mobile’s strongest rivals.
That policy might seem contradictory with the company’s fight against Internet service providers. Chief Executive Reed Hastings himself considers Netflix as “big believers in the free and open Internet.” But its position of slowing load times and reduction of video resolution actually makes sense in financial terms.
The company claims that it is protecting its own customers from hefty fees for exceeding the limits on their data plans.
Last year, Netflix and its allies argued that the lack of federal protections would lead Internet service providers to easily throttle traffic to customers and companies that did not pay for access to Internet fast lanes. That is an issue the firm takes very seriously, given that it is behind more than one-third of all downstream Web traffic during peak hours in North America.
By throttling its own mobile customers, Netflix pretends to help them think twice about watching “House of Cards” on their tablets or smartphones.
“Netflix is trying to make a buck,” said Michael Pachter, an analyst for Wedbush Securities. “Yes it’s hypocritical, but it’s business.”
The company that has been throttling its own subscribers who rely on the largest cellphone service providers in the United States has said that it has never limited video quality for Sprint and T-Mobile users because the two carriers have more consumer-friendly policies. Those c
ustomers do not cross data caps thanks to a feature that automatically slows streaming.
Netflix customers will soon be able to choose
Starting in May, Netflix mobile customers will be able to have control over their data usage. In a blogpost published Thursday, spokeswoman Anne Marie Squeo announced a data-saving functionality that will allow mobile subscribers decide whether they want to view lower-quality streams to save money.
Squeo said the company rejected data caps, since they consider them as negative for consumers and the Internet in general.
Source: Los Angeles Times