Utterly Incoherent Wall Street Journal Missive Blames Netflix For, Well, Everything

Techdirt|Karl Bode

For years now, the broadband industry has worked tirelessly to villainize Netflix, painting the company as a bandwidth glutton, hungrily eating "more than its fair share" of Internet traffic resources. A growing assortment of fauxademics, editorial writers, consultants, revolving door regulators and other telecom sector PR tendrils have relentlessly tried to argue that Netflix is a dirty freeloader and a nasty company that is really the one to blame for most of the Internet's problems.

There are several reasons for this. One, Netflix is a threat to traditional cable television revenues, and therefore is already seen as the enemy by telecom executives. Two, Netflix has replaced (now absent) Google as the leader of the corporate pro-net-neutrality movement, arguing against things like punitive usage caps. And three, telecom companies quite simply want companies like Netflix to pay them a fealty "troll toll" for doing absolutely nothing, which is the exact kind of pampered, duopolist bullshit that started the net neutrality kerfuffle in the first place.

Usually, telecom-driven missives against Netflix make at least a fleeting effort at coherent sense. But a new article by Holman W. Jenkins Jr. at the Wall Street Journal deserves a little attention for setting a new low in barely-comprehensible telecom industry puffery. As with any good Netflix attack piece, Jenkins has to begin by highlighting just how much traffic Netflix users consume:

"More than one-third of today’s expensively rolled-out bandwidth already is consumed in peak hours by a single company, whose customers represent a tiny minority—about 1.2%—of Internet users. Richard Bennett of High Tech Forum calculates: “If 12 percent of the Internet user population is streaming at prime time, the traffic load goes up to 340% of today’s level; and if it rises to 60%, the load goes up to 1700%.” And suppose users want super-high resolution 4k TV, which requires four times as much bandwidth as today’s hi-def?"

Generally Netflix traffic stats are trotted out to imply that Netflix is somehow consuming too much of the overall pipe, or isn't paying its fair share to deliver this traffic, which as we've pointed out for years is total nonsense. It's quite simple: users who pay their ISP for bandwidth are requesting this data, which Netflix (who also pays for bandwidth) then sends to them. Insatiable mega-ISPs honestly believe a bigger cut of this revenue is their god-given right; as such, they work tirelessly to get it, whether it's via usage caps or interconnection fees.

And to be fair, trying to argue that massive, hugely unpopular telecom giants should be able to freely nickel and dime consumers and small companies can't be easy. Making an argument that stupid usually requires some rhetorical sleight of hand that sometimes wanders into the realm of the magical. Unfortunately for Jenkins, the best he can do is an utterly confusing screed involving backpackers and grandmothers:

"Make no mistake: The bandwidth used by Netflix is paid for. But it’s paid for inefficiently, by spreading the cost over all broadband subscribers. In the airline industry, if backpackers and grannies had to pay for the frequent connections, last-minute seat availability and other features demanded by business travelers, there would be fewer planes, fewer flights, less connectivity, less travel for everyone—which is a fair model of the future that utility regulation will now create for broadband users."

It's impossible to even deconstruct that argument because it actually makes no coherent sense. One, as we've explained at length, ISPs are not now facing "utility regulation" under the new neutrality rules. Two, under the current Netflix model, ISPs are paid for the bandwidth (sometimes several times over), and customers pay for the content they want. Is it actually possible to get any more efficient than that without involving telepathy? Jenkins, however, is clearly annoyed that the government has stepped in with rules preventing the Comcasts of the world from erecting totally unnecessary tolls on the Internet:

"Unfortunately the entire confused and inane thrust of federal Internet policy lately has been to sustain the Netflix distortion. Even collecting token amounts, as Comcast did, for expanding direct peering to receive the Netflix deluge apparently now will be verboten. And forget about the elegant fix of usage-based pricing, i.e., charging each customer according to his demand on the infrastructure. It’s clearly a nonstarter with regulators and activists."

Poor fellow! How does Jenkins sleep at night knowing that the government won't allow Comcast to impose completely arbitrary and anti-competitive new fees on content companies? What kind of a world are we building where we don't let companies like Comcast impose draconian, unnecessary and hugely unpopular usage caps to fatten revenues? Won't you think of the children? Why can't you people understand that Netflix is the root of all evil?

"So what does this mean? The oomph behind a regulated Internet isn’t coming from the net-neutrality philosophes. It’s coming from Netflix and its attachment to a particular pricing model for broadband...By the way, we are not stating a Netflix conspiracy theory...the fact is, regulators are trying like crazy to make the necessary broadband seem like a free lunch to Netflix customers—a short-termism that necessarily undermines the incentive of others to compete with cable’s already-paid-for infrastructure."

From there, Jenkins throws around a lot of terms like it's pretty clear he doesn't actually understand "overbuilders!", makes a few bizarre, unsubstantiated claims that Netflix supports last mile broadband monopolies, and even tries to vaguely blame Netflix for AT&T and Verizon's plan to hang up on millions of DSL users (something that's long been in the works and is totally unrelated to net neutrality or the FCC's Title II push).

So Jenkins' logic is painfully murky, but I think he's trying to argue that Netflix is to blame for helpful rules that protect consumers from aggressive broadband monopolists in uncompetitive markets. He's partially right, but he's forgetting one little thing: consumers. Consumers drive the net neutrality movement. Consumers drive the refusal to accept usage caps on already-expensive broadband services. Consumers and innovators are the ones pushing for healthy markets free of gatekeeper manipulation. If Jenkins had any real courage, he'd stop attacking Netflix and attack the thing it's clear he finds truly despicable: consumer power.