VIDEO-STREAMING service Netflix yesterday became the most visible company with a business relationship with Comcast to oppose the No. 1 cable operator's $45.3 billion merger with Time Warner Cable.
"It's more in the public interest to either not have them merge or if the government goes ahead with it, to at least put some significant merger agreements, settlements in there," Netflix chief executive officer Reed Hastings said in a webcast following the company's quarterly results.
Netflix added in a quarterly letter to shareholders that Philly-based Comcast would control access to broadband in a majority of U.S. homes while also having "anticompetitive leverage" to charge arbitrary fees on companies that rely on its Internet service.
Until now, the only vocal advocates calling for an outright rejection of the Comcast-Time Warner Cable merger had been public-interest and consumer groups such as Public Knowledge and the Consumers Union, as well as U.S. Sen. Al Franken, a Minnesota Democrat who has often opposed media concentration.
Netflix has tussled with the cable operator in recent months over the speed at which Comcast delivers the online streaming service to its cable customers. In February, Netflix struck a deal to pay Comcast for faster online delivery of its movies and TV shows through a practice known as interconnection, after customers complained about slow service.
While Netflix and Comcast announced the news in a joint statement that sounded friendly at the time, just a month later Netflix's Hastings, in a blog post, blasted Comcast for charging these interconnection fees.
In an interview with Reuters yesterday, the Netflix executive said that he favors the federal government imposing "some enduring form of no-fee interconnect" if the merger is approved by regulators.
Comcast quickly responded with a lengthy statement.
"Netflix's opposition to our Time Warner Cable transaction is based on inaccurate claims and arguments," the cable operator said. "There has been no company that has had a stronger commitment to openness of the Internet than Comcast."