This question comes to the forefront as Netflix, Inc. (NASDAQ:NFLX) recently announced that it will be launching its service in Australia and New Zealand this month. In a promotion in collaboration with internet service provider iiNet, the bandwidth users in those countries consume while viewing content on the streaming service will not be counted against those users’ monthly bandwidth allowance. Other publications such as GigaOm, The Verge and Quartz have also noticed the seeming inconsistency of the move.
Doesn’t this run against the company’s stance that all traffic on the Internet should be equal? Isn’t Netflix, Inc. (NASDAQ:NFLX) the company famously battling carriers in the United States like Verizon Communications Inc. (NYSE:VZ) who they have accused in the past of discriminating against traffic their subscribers use?
The practice of having bandwidth used for certain services not count against daily, weekly or monthly limits for users is called “zero rating”. In effect, this discriminates against other services which bandwidth will be counted against user limits because they have no agreement with an internet service provider.
“Zero rating,” depending on who you ask, is against Net Neutrality as it clearly gives some companies or groups an advantage. Larger companies can strike deals, either with money involved or not, to have their bandwidth not count against user bandwidth limits. Is Netflix, Inc. (NASDAQ:NFLX) then, only in favor of Net Neutrality when it serves the company?
Nonetheless, according to the entertainment content distributor, it’s still a staunch Net Neutrality supporter.
“We are committed to the principles of strong net neutrality. These arrangements are common in Australia and we opted not to put our members at a disadvantage to those of rival content providers whose viewing wasn’t being counted,” the company said in an emailed statement to Quartz.
Carl Icahn’s Icahn Capital LP owned about 1.41 million Netflix, Inc. (NASDAQ:NFLX) by the end of 2014.
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