TIME Tech Policy

Why Twitter and the Rest of Silicon Valley Should Disclose Their Diversity Data

Twitter's IPO Spurs Horse Race Among Exchanges Seeking Listing
The Twitter Inc. logo is displayed on a mobile device for a photograph in New York, U.S., on Monday, Sept. 16, 2013. Twitter Inc., which announced plans last week for an initial public offering, is still deciding whether to list on the New York Stock Exchange or Nasdaq Stock Market, setting off a horse race for the high-profile deal. Photographer: Scott Eells/Bloomberg via Getty Images Bloomberg/Getty Images

Twitter has become the largest media platform for minority voices on the planet. Everything from the Trayvon Martin case to the BET Awards has become the equivalent of a front-page headline on the site thanks to the social network’s trending topics, which aggregate the most popular conversations and present them to all Twitter users. Blacks over-index heavily on the site, with 29 percent of black Internet users in the U.S. reporting that they actively use Twitter in a recent Pew Research Center survey, compared to 16 percent of whites and Hispanics. In the same way Twitter owes much of its success to the early adopters who gave the site structure and the celebrities who gave it clout, it can also thank black people for helping it reach critical mass and climb to 255 million monthly active users.

So it’s disappointing that the company is so far resisting a positive trend in Silicon Valley, the disclosure of employee data related to race and gender. Chances are, Twitter’s employee roster looks a lot like its Bay Area competitors—overwhelmingly male and white. That’s not a dirty little secret in the Valley; it’s been the modus operandi for decades. The common race and gender tropes of tech startups are so ingrained that we now have an HBO sitcom to mock how far removed the tech scene is from the way the rest of the world lives.

Most tech firms have spent years resisting past entreaties to cough up demographic data. But the stonewalling ended in May, when Google published a diversity report revealing that the company is about 70 percent male, 61 percent white and 30 percent Asian. That set off a domino effect that led Yahoo, LinkedIn, Facebook and others to publish similar data. But huge consumer tech companies like Apple, Twitter and Amazon have so kept their own figures to themselves (Apple CEO Tim Cook has said the company will release its data “at some point“). Civil rights activist Jesse Jackson is planning an online petition and a social media campaign Friday to convince Twitter in particular to disclose its employee data. None of the companies mentioned responded to multiple emails from TIME asking whether they planned to release diversity reports in the future.

All of these companies, of course, are free to hire whoever they please. They work in a field so hyper-competitive that Google was once willing to give employees offered jobs by Facebook counteroffers within an hour. But anyone who’s ever held a professional job knows who you know matters as much as what you know, and many people in our so-called melting pot continue to maintain friendships exclusively within their own race. Minorities are at a natural disadvantage trying to crack into a world where no one looks like them.

Meanwhile, software development is one of the fastest-growing job sectors in the U.S., expected to grow by 23% from 2012 to 2022, according to the Bureau of Labor Statistics. Historically underrepresented minorities are showing a greater interest in the field—20 percent of the students who graduated with a degree in computer and information sciences in 2012 were black or Hispanic, up from 16 percent a decade prior (at Google, by comparison, 5 percent of workers are black or Hispanic and 4 percent are multiracial). Making a commitment to diversity now means that a wider number of people will have access to these well-paying jobs in the future, a result that will help the tech sector remain prosperous and in-tune with cultural shifts as whites continue to decline as a percentage of the overall U.S. population.

Perhaps the companies that have yet to speak up on diversity fear the negative headlines that will come from admitting that their organizations are mostly comprised of white males. But an annual diversity report is a flag in the sand that indicates inclusiveness is important to a company, important enough to stake its reputation on. Diversity in the workforce has proven benefits for business, and it’s a savvy long-term marketing tool to help recruit employees who value diversity in their work life. The public pressure that naturally stems from such transparency will also encourage tech firms to partner with organizations already looking to boost involvement by women and minorities in computer science, such as Girls Who Code, Black Girls Code and the national societies for black and Hispanic engineers.

Obviously this is not just an issue that affects Silicon Valley. My own industry has seen a declining percentage of minorities working in newsrooms, and men still outnumber women in journalism jobs nearly two-to-one. We could use some more transparency on these issues as well. All U.S. companies with more than 100 employees are required to send detailed demographic data to a federal agency called the Equal Employment Opportunity Commission each year, so there’s no reason they can’t share it publicly. The European Union passed a law in April requiring firms with more than 500 employees to publicly release data related to workforce diversity, environmental sustainability and human rights.

It shouldn’t take a government mandate to introduce transparency, though. Right now the tech giants are uniquely positioned among American businesses to take a leadership role on the issue of diversity in the workplace. Our country’s two most valuable companies, Apple and Google, reside nine miles from each other in Silicon Valley. They and their smaller competitors are constantly crowing about how their disruptive products and progressive worldviews are changing the world for the better. Well, here’s a dead-simple way to help fix the world: take that race and gender data you’re already collecting and let everyone else see it. Public scrutiny of the information will inevitably beget positive change.

TIME Tech Policy

Verizon: Buffering Problems Are Netflix’s Fault

Netflix
The Netflix Inc. is displayed on an Apple Inc. iPhone 5s in this arranged photograph in Washington, D.C., U.S., on July 9, 2014. Bloomberg/Getty Images

The latest salvo in an ongoing PR battle between the streaming company and the ISPs

Got buffering problems? It’s all Netflix’s fault, says Verizon. The Internet Service Provider published a lengthy blog post Thursday arguing that Netflix’s mismanagement of its video streaming traffic has led to slower speeds for users. It’s the latest salvo in a months-long public relations battle over who should pay for Internet traffic.

Following users’ complaints about slow speeds, Verizon says it studied congestion across many points in its network using a test case in Los Angeles. The company looked at both the point where content is delivered into users’ homes and the interconnection points where transit providers deliver data from content companies like Netflix to consumer-facing ISPs like Verizon. For most content delivered to Verizon’s network, there was no congestion. However, Netflix content approached 100% capacity during peak utilization hours, which can lead to slower buffering speeds for end users.

According to Verizon, Netflix is to blame for this because the company didn’t reserve enough capacity, either through the transit providers or through Verizon directly, to accommodate the massive amount of video traffic it sends out on a daily basis.

“For whatever reason (perhaps to cut costs and improve its profitability), Netflix did not make arrangements to deliver this massive amount of traffic through connections that can handle it,” Verizon said in its blog post. “Netflix knew better.”

Netflix countered in a statement of its own, saying that ISPs are responsible for controlling congestion levels on their networks.

“When Verizon fails to upgrade those interconnections, consumers get a lousy experience despite paying for more than enough bandwidth to enjoy high-quality Netflix video,” a Netflix spokesman said in an email. “That’s why Netflix is calling for strong net neutrality that covers the interconnection needed for consumers to get the quality of INTER-net (sic) they pay for.”

Netflix has been advocating for months that video providers should not have to pay fees to ISPs to deliver their content efficiently (even though Netflix has in the past paid third parties such as Cogent for this service). The streaming service has tried to conflate the issue with net neutrality, arguing that such fees amount to a toll ISPs can use to prioritize certain Web-based services above others. ISPs such as Verizon and Comcast have pushed back, saying that Netflix and its customers should foot the bill for delivering its massive video traffic, not all the subscribers of a particular ISP.

For now, Netflix has agreed to pay both Verizon and Comcast fees to boost buffering speeds for customers. And the streaming service has abandoned an earlier strategy to blame Verizon directly within its app for slow streaming speeds. The Federal Communications Commission will likely be the final arbiter on who is to blame for slow buffering — the agency is currently investigating the dispute between Netflix and ISPs and may provide guidance on the issue when it drafts new regulations for net neutrality later this year.

TIME Tech Policy

Aereo Backer Barry Diller: ‘It’s Over Now’

Barry Diller Aereo
Barry Diller, chairman and chief executive officer of IAC, pauses during an interview in New York City on April 1, 2014 Scott Eells—Bloomberg/Getty Images

The controversial TV-streaming service Aereo’s business methods were ruled illegal by the Supreme Court on Wednesday morning, dashing the startup’s plans to disrupt the well-entrenched pay-TV industry. That’s particularly bad news for media bigwig Barry Diller, who helped the startup get off the ground when his company IAC led a $20.5 million funding for Aereo back in 2012.

Diller is a former chief executive of both Paramount Pictures and Fox who has since leaped into the digital age full-bore. His current company IAC owns hot digital properites such as CollegeHumor, Vimeo and OkCupid. Aereo fit in nicely with his vision of the digital future, and he rewarded the startup with considerable cash. In addition to the original $20.5 million, IAC was also involved in later funding rounds of $38 million and $34 million for Aereo, according to Crunchbase.

Now it’s unclear whether the startup will have any future at all. Diller had previously said there was “no Plan B” if the courts ruled Aereo illegal. On Wednesday, he seemed willing to accept defeat. “We did try,” he told CNBC, “but it’s over now.”

Diller told Bloomberg that though the millions dumped into the company weren’t a significant financial loss for IAC, blocking Aereo’s technology was “a big loss for consumers.”

TIME Tech Policy

Netflix’s Disputes With Verizon, Comcast Under Investigation

Updated 3:03 p.m.

The Federal Communications Commission is investigating ongoing traffic disputes between Netflix and a variety of Internet Service Providers, FCC Chairman Tom Wheeler said Friday. Wheeler said in a statement that he obtained the terms of the deals that Netflix signed with Verizon and Comcast to boost its streaming speeds on their networks. The FCC is in the process of obtaining information about Netflix’s similar deals with other ISPs.

“The bottom line is that consumers need to understand what is occurring when the Internet service they’ve paid for does not adequately deliver the content they desire, especially content they’ve also paid for,” Wheeler said in the statement.

Netflix streaming speeds have declined precipitously on several large ISPs in recent months, but no company has been willing to admit fault. Netflix blames ISPs for throttling speeds as a way to force the streaming service to pay more for its videos to get to subscribers. Many ISPs argue that content providers like Netflix have long footed the bill for transferring data across the Internet, and Netflix’s current arguments are mostly grandstanding.

Netflix has signed deals to pay both Verizon and Comcast to establish a direct connection to their networks and boost speeds, but that has not ended the controversy. Last week Netflix began blaming Verizon for long buffering times within its app. Verizon issued a cease and desist letter demanding that the message be removed, and Netflix has backed down for now.

Now, it seems, the FCC will try to determine definitively who is to blame for the slowed speeds. “We don’t know the answers and we are not suggesting that any company is at fault,” Wheeler said. “To be clear, what we are doing right now is collecting information, not regulating. We are looking under the hood. Consumers want transparency. They want answers. And so do I.”

The investigation comes as the FCC is already drafting new rules for net neutrality, which would govern whether ISPs can set different Internet speeds for different types of online content. Peering deals like the ones Netflix has drafted with Verizon and Comcast were not covered under the previous net neutrality laws, which only dealt with the so-called “last mile” of the Internet that ISPs deliver into customers’ homes. But Wheeler’s statement indicates that the new rules may also encompass these peering deals that form the backbone for how data is transferred online.

In a statement, Comcast spokeswoman Sena Fitzmaurice said the company welcomes the FCC investigation. “We welcome this review which will allow the Commission full transparency into the entire Internet backbone ecosystem and enable full education as to how this market works,” she said. “We have long published our peering policies for example, and are open to discussions about further disclosures that would benefit consumers.”

The FCC published a first draft of new net neutrality rules in May and is currently seeking public comment on them until the end of July.

TIME Tech Policy

Everything You Need to Know About the Netflix-Verizon Smackdown

AFP/Getty Images

Netflix is once again making headlines because of a very public spat with an Internet Service Provider. This week Netflix placed a message on the buffer screen of its app blaming Verizon and its FiOS Internet service for slow streaming speeds. Verizon took offense and issued a cease-and-desist letter demanding that Netflix remove the message. Now Netflix has just a few days to prove that it was appropriate to blame the ISP, or Verizon may take legal action. This recent bickering is just the latest step in a winding saga that also involves Comcast, Google and the future of the Internet. Here’s a quick Q&A to get you up to speed on the story behind the Netflix-Verizon feud.

OK, so why exactly is Verizon mad at Netflix?

Netflix has been testing a new version of the buffering screen on its app that gives customers more specific information about why a video is loading slowly. On Tuesday a Vox Media employee spotted the new screen, which placed the blame for sluggish streaming squarely on Verizon. “The Verizon network is crowded right now,” a message on the screen reads.

 

 

It is extremely unusual for an online video company to blame a specific ISP for service problems, but Netflix says the message is an effort to “keep [its] members informed.” On Wednesday, Verizon dismissed the message as a “PR stunt.” But Thursday the telco giant issued a cease-and-desist letter to Netflix demanding it remove the accusatory language from its app. “There is no basis for Netflix to assert that issues with respect to playback of any particular video session are attributable solely to the Verizon network,” the letter reads. “As Netflix knows, there are many different factors that can affect traffic on the Internet.”

Different factors, huh? Like what?

As my colleague Sam Gustin has explained, the journey for a video from Netflix’s servers to your living room is pretty complicated. Broadband companies like Verizon and Comcast are responsible for delivering online content across the so-called “last mile” into customers’ homes. But before that happens, Internet data is typically exchanged between consumer-facing ISPs and bandwidth providers that serve as intermediaries between content companies and consumer ISPs. These deals, called peering agreements, have historically been free, but ISPs like Verizon are now demanding money to connect to their network because they are being forced to transfer lots of high-definition video from companies such as Netflix. Stalled negotiations between Verizon and bandwidth provider Cogent earlier this year caused Netflix speeds to fall significantly for Verizon customers.

But I thought Verizon and Netflix already made a deal to fix that?

They did. In April Netflix signed a paid peering agreement with Verizon to directly connect to its broadband network and bypass intermediaries such as Cogent. Netflix, it seems, is not happy with the improvements (if any) so far, so the company has decided to call Verizon out directly to consumers.

Doesn’t Netflix already have beef with some other Internet Service Provider?

Yes, Netflix is quickly becoming the Tupac of online video companies, racking up enemies right and left. In February the company signed a paid peering agreement with Comcast, which first thrust the negotiations between ISPs and content companies into the public conversation. Netflix is very unhappy that it has to pay either Verizon or Comcast to connect to their networks. As Netflix sees it, the ISPs are getting paid twice, once from customers who are promised a certain quality of Internet service per month and then again from content providers who must pay to deliver their video to consumers.

Hey, yeah! That’s not fair! Down with Verizon and Comcast!

Calm down. From the ISPs’ point of view, Netflix is doing a lot of public grandstanding to try to rewrite the rules of interconnection deals that have been around for decades. Netflix was already paying intermediaries like Cogent to deliver its content before streaming speeds slowed earlier this year. Now, the ISPs say, Netflix is trying to get its content delivered for free and force all broadband subscribers pay for the cost of delivering massive amounts of high-definition video instead of just Netflix subscribers. But some ISPs, such as Google Fiber, agree with Netflix and don’t charge companies to establish a connection to their network.

But isn’t this a violation of net neutrality, or something like that?

Not really. Net neutrality rules concern the “last mile” delivery of content into residential customers’ homes. Netflix’s fight with Verizon and Comcast centers on how content is delivered to consumer-facing ISPs and who pays for it. Netflix believes the core issue—that ISPs have the ability to charge different companies different prices to connect to their networks—means these peering issues are in the spirit of the net neutrality debate. Since the net neutrality rules are currently being rewritten, it’s possible that peering agreements could be incorporated into the new regulations. FCC Chairman Tom Wheeler has said he will look into Netflix’s paid peering complaints as the new net neutrality governance is drafted.

So are Netflix and Verizon going to court?

In its cease and desist letter, Verizon said Netflix must tell it the names of every customer who saw the accusatory message, along with proof that Verizon’s network was to blame for slow speeds, within five days. Otherwise Verizon reserves the right to pursue “legal remedies.” Netflix has so far not indicated that it plans to remove the messages blaming Verizon. A Netflix spokesman told TIME that the company is trying to provide transparency to consumers and Verizon is “trying to shut down that discussion.” But neither side actually wants a court battle, since the discovery process might dredge up communications during their negotiation process that they’d rather keep private (just ask Apple and Samsung). They’ll most likely come to a private agreement that satisfies both parties.

Screw these companies. When are my movies going to start streaming faster?

Both Netflix and Verizon have said that the streaming speeds would increase over the course of months, not days or weeks. “We are working quickly to implement the network architecture and expect improvements to be experienced across the FiOS footprint throughout 2014,” Verizon spokesman Bob Elek said in an e-mail to TIME. We’ll have a better idea of whether the paid peering deal has been effective when Netflix releases its monthly ranking of ISP streaming speeds later this month. But even if the service quality increases and the legal threats end, the rhetorical battle between Netflix and the major ISPs is likely to continue for quite a while.

Now go on and marinate on that while you watch the new season of Orange Is the Black. Hopefully, with very little buffering.

TIME Tech Policy

Google and Netflix Are Teaming Up Against Internet Providers

In its heated debate with Comcast over who should pay for the delivery of online content to customers’ homes, Netflix just got a big co-sign from Google. In a blog post published Wednesday, Google said that it doesn’t charge companies like Netflix for a direct interconnection to its Fiber Internet network. Such connections are necessary to deliver online content across the so-called “last mile” of the Internet to users’ computers. Netflix has paid other ISPs, such as Comcast and Verizon, to establish a direction interconnection to their networks and boost streaming speeds.

“We don’t make money from peering or colocation,” a Google Fiber official wrote in the post. “Since people usually only stream one video at a time, video traffic doesn’t bog down or change the way we manage our network in any meaningful way — so why not help enable it?”

Google’s argument is essentially the same as Netflix’s—that Internet service providers have already agreed to provide customers download speeds at a certain rate and should honor those deals without also charging content companies to meet those speeds. Companies like Comcast argue that there are costs associated with delivering the large amount of video data Netflix carries into people’s homes, and Netflix should bear those costs instead of everyone that uses a given ISP. Federal Communications Commission Chairman Tom Wheeler has said that the FCC will look into Netflix’s complaints regarding paid peering agreements.

Though Google Fiber is an ISP that could theoretically make more money charging companies like Netflix, it’s a minuscule part of Google’s business that is mostly aimed at shaming traditional Internet providers like Comcast into building faster networks (faster Internet means more Google searches, which means more advertisements served). Free peering deals are another opportunity for Google to attempt to set a standard that other ISPs might follow. Larger parts of Google’s business, such as YouTube, would greatly benefit from a future where content companies don’t have to pay ISPs to guarantee their content streams speedily in customers’ homes.

TIME Tech Policy

Sprint to Pay Record $7.5 Million for Violating Do-Not-Call Rules

A Sprint Store Ahead Of Earnings Figures
Bloomberg—Bloomberg via Getty Images

Wireless carrier Sprint is being dinged with a $7.5 million fine for calling and texting people who placed their phone numbers on the company’s do-not-call registry, which is supposed to protect Americans from unwanted telemarketing communications. According to the Federal Communications Commission, Sprint failed to log some consumers’ do-not-call preferences due to “human error” and “technical malfunctions.” The $7.5 million sum is the largest fine ever doled out by the FCC for violating do-not-call policies.

“When a consumer tells a company to stop calling or texting with promotional pitches, that request must be honored,” Travis LeBlanc, acting chief of the FCC Enforcement Bureau, said in a press release. “Today’s settlement leaves no question that protecting consumer privacy is a top enforcement priority.”

In addition to the fine, Sprint must designate a senior manager to oversee its do-not-call implementation and file annual compliance reports with the FCC for two years. Sprint was hit with a $400,000 fine in 2011 for similar violations.

The Federal Trade Commission manages a national Do Not Call registry that allows people in the United States to opt out of receiving telemarketing calls. Many large companies such as Sprint that engage in telemarketing are also required to manage their own internal do-not-call lists.

 

TIME Tech Policy

Americans Will Never Have the Right to Be Forgotten

Attendees work on laptops during the Google I/O developers conference at the Moscone Center on May 15, 2013 in San Francisco.
Attendees work on laptops during the Google I/O developers conference at the Moscone Center on May 15, 2013 in San Francisco. Justin Sullivan—Getty Images

Americans shouldn’t expect the same privacy protections as in Europe, where a top court has ruled citizens have a "right to be forgotten"

Privacy has just taken on new meaning in Europe. The European Union’s highest court has ruled that any of the region’s 500 million citizens can compel Google and other search engines to remove information about them from the companies’ search results, even if that information is neither inaccurate nor unlawful. The surprising decision, which Google can’t directly appeal, is either a bold reclamation of privacy rights in the digital era or a mandate to let anyone rewrite history as they please, depending on your perspective. It’s also the clearest sign yet that U.S. and European data protection laws are heading down divergent paths.

The European Union has always placed an emphasis on protecting its citizens’ data. The latest ruling, for a case in which a Spanish lawyer demanded that Google remove links to an old news article about his debts, is based on a 1995 European Parliament directive that provided extensive protections for personal data. The Parliament is in the midst of passing an even more sweeping update to the law that will make “data protection first, not an afterthought,” according to the body. A key tenet of this new policy is the “right to be forgotten,” the idea that individuals have the right to delete information about themselves that is not legally required to remain online. “This is the fundamental right of an individual as opposed to the business right of a company,” says Marc Rotenberg, president of the Electronic Privacy Information Center. “When courts are asked to consider those claims, I think they rightly look more seriously at the individual’s claims first.”

The U.S. has no privacy protections that even approach the broad aims of Europe’s laws. It’s not because Europe is the innovator on this front—former Supreme Court Justice Louis Brandeis first introduced the “right to privacy” in the U.S. in an 1890 article in the Harvard Law Review that was globally influential. It’s also not because Americans don’t value their digital privacy. A recent study by the Pew Research Center found that 68 percent of American Internet users believe U.S. laws don’t go far enough to protect individual online privacy. But a variety of factors mean American privacy legislation will likely never reach the scope of Europe’s laws.

First, Europe’s new ruling is difficult to reconcile with the First Amendment, which grants citizens the right to free speech. A U.S. law that compelled a company like Google to limit the type of content it shows in search results likely wouldn’t pass muster in American courts, experts say, because it could be construed as a form of censorship. “The First Amendment really does prevent this kind of widespread unpublishing of data,” says Danny O’Brien, international director at the Electronic Frontier Foundation. “In the U.S., free speech sort of trumps privacy.”

Americans do have privacy protections, but they’re spread across a variety of state and federal laws that typically apply to specific groups of people. For instance, California has a law somewhat similar to the E.U. ruling that allows people to demand that tech companies delete their data, but it’s only for minors. On other online issues, like hijacking someone’s digital identity, punishments vary from state to state. With Congress’s ability to pass new legislation near an all-time low, it’s doubtful sweeping federal change will suddenly come on this front anytime soon. “The way in which the U.S. protects privacy is through a patchwork series of laws,” says Andy Sellars, a staff attorney for the Digital Media Law Project housed at Harvard University. “The EU has always tended to think of a privacy as more of an overarching thing that touches on all other domains.”

Money, of course, also plays a role in the way laws are formed. Though energy company lobbyists are the ones pulling the strings on shows like House of Cards, Google spent $15.8 million on D.C. lobbying in 2013, more than Exxon Mobil. “That has played a big role in what Washington has or has not done,” Rotenberg says. By comparison, the tech giant spent around $2 million to influence the European Union last year.

Even though the U.S. is unlikely to adopt similar policies, the E.U. ruling will still have global implications. Sellars says it’s likely that Google will only delete content in the countries where it is required to do so. Twitter has this policy, and Google does it on a small scale for issues such as German laws banning content related to Nazism. Such measures could lead to a decidedly different Internet experience on American shores compared to European ones, a concept known as balkanization that Silicon Valley views as anathema to the open Internet.

Many questions remain. It’s not clear whether Google will readily delete data when requested or try to protect its search results by taking individual cases to local judges, a strategy that could rack up huge legal fees. The boundaries of what can be deleted are also extremely vague, with the court only saying that information that is no longer relevant or timely is game to be scrubbed. Prominent figures won’t have a right to delete information in the public interest, but that exception is open to wide interpretation.

Ultimately, the ruling, which could eventually impact other tech companies like Facebook and Twitter, will establish a different set of online standards and expectations based on where users happen to reside. And those varying standards aren’t likely to be reconciled anytime soon. The question judges, legislators and citizens will have to grapple with, Sellars says, is “whether or not the Internet is truly a global platform where all of us have access to the same information or whether it is really just something that is going to be recaptured by nations over time.”

TIME deals

Comcast Exec Says Time Warner Cable Deal Will Be Great for America

The Comcast Center, home to Comcast's corporate headquarters, in Philadelphia
The Comcast Center, home to Comcast's corporate headquarters, in Philadelphia. William Thomas Cain—Getty Images

Comcast's policy chief David Cohen says he hasn't heard any "rational, knowledgeable voices" objecting to the $45 billion merger

Comcast’s proposed $45 billion purchase of Time Warner Cable won’t violate U.S. antitrust laws or federal public interest rules, a senior Comcast executive said over the weekend. On the contrary, a merger between the two largest cable companies in the country will be great for consumers, Comcast executive vice president David L. Cohen said in an interview with C-SPAN.

Cohen made his comments as opposition to the deal continues to grow from public interest groups, lawmakers, and industry observers. Critics of the deal say the merger would concentrate too much market power in the hands of a single media and entertainment behemoth, potentially leading to higher prices for consumers. Comcast dismisses such fears and insists that the merger will result in better service for consumers.

The Justice Department is examining the proposed deal to make sure it doesn’t violate antitrust law, along with more than two dozen state attorneys general who have joined a multi-state group reviewing the transaction. The merger also faces scrutiny from the Federal Communications Commission, which is charged with ensuring that the deal serves the public interest.

“This transaction is all about increasing competition and creating more consumer benefit as a result of gaining additional scale,” Cohen told C-SPAN. Comcast says that the deal isn’t anticompetitive because the two companies don’t compete for consumers in the same markets. Over the last few decades, the nation’s largest cable TV companies have divided up the U.S. by region so that the major players now dominate their respective areas.

Comcast rules in Philadelphia, Chicago and Boston. Time Warner Cable dominates in New York City, Dallas and Los Angeles. Cohen says that the combined company would control no more that 30% of the national pay-TV market. (Time Warner Cable was spun off from TIME parent Time Warner in 2009.)

Cable TV represents a shrinking part of the industry. Last year, cable providers lost nearly 2 million video subscriptions, the first full-year decline on record, according to a recent study by research group SNL Kagan. It’s the latest sign that consumers are increasingly “cutting the cord” and gravitating toward Internet-based entertainment options like Netflix and Hulu.

(MORE: Netflix vs. Comcast ‘Net Neutrality’ Spat Erupts After Traffic Deal)

As the Internet has become a crucial tool for commerce, communications and entertainment, companies like Comcast and Time Warner Cable are increasingly becoming broadband companies. The old distinctions between cable TV, Internet, and phone service are starting to collapse. Millions of Americans now subscribe to bundled packages that combine all three services through a single pipe coming into their homes.

If Comcast buys Time Warner Cable, the company would have nearly 40% of the high-speed wireline broadband Internet market in the U.S., according to industry estimates. Critics of the deal say that would give Comcast an alarming amount of power over the 21st century’s signature communications medium.

Cohen acknowledges that the deal’s implications for the broadband market are “appropriate to think about and discuss,” but argues that it’s “not a very scary story,” due to increasing competition from wireless broadband. “I think it’s indisputable today that wireless is certainly beginning to be an effective competitor and substitute for at least many uses of broadband,” Cohen said. (Harvard Law School professor Susan Crawford, a fierce critic of the deal, disputes that assertion. Wireless broadband service “will not substitute” for high-speed wired access, she told TIME last year.)

Comcast argues that bigger is better. “Sometimes big is a bad thing,” said Cohen. “I acknowledge that. But sometimes big is really important, really necessary and really good. And that would tend to be in high capital expenditure industries, in industries where innovation is fast moving and where you need a lot of investment in R&D and innovation to keep pace. And that is our industry.” He added: “The rationale for this transaction is all about scale. We are going to get bigger.”

(MORE: Susan Crawford. Is Broadband Internet Access a Public Utility?)

Cohen dismissed opponents of the proposed merger as “the same group of people” who have opposed media and telecom consolidation over the last two decades. Their “sky is going to fall” predictions have been “discredited and disproven,” Cohen said. “I have been struck by the absence of rational, knowledgeable voices in this space coming out in opposition or even raising serious questions about the transaction,” Cohen added.

Last month, editors at The Economist magazine wrote a sharply-worded editorial against the deal, urging U.S. officials to “reject a merger that would reduce competition, provide no benefit to consumers and sap the incentive to innovate.” A former FCC commissioner has called the deal “an affront to the public interest.” The New York Times editorial board raised substantive concerns about the deal, as did columnists at The New Yorker and The Washington Post. Harvard Law professor Susan Crawford, perhaps the deal’s most persuasive critic, argues that broadband Internet access should be viewed as a public utility.

TIME Tech Policy

Netflix vs. Comcast ‘Net Neutrality’ Spat Erupts After Traffic Deal

Netflix Illustrations Ahead Of Earnings
Andrew Harrer—Bloomberg/Getty Images

Netflix and Comcast are battling over whether "paid peering" deals should be considered a net neutrality issue. The FCC will soon decide

Netflix CEO Reed Hastings lashed out at the top U.S. Internet service providers on Thursday for charging an “arbitrary tax” on the popular online video company for ensuring that users receive good service. Hastings made his comments in a blog post one month after Netflix struck a deal with Comcast to connect their networks directly to improve service for consumers.

Hastings’ comments are the latest salvo in the multi-year battle over “net neutrality,” the idea enshrined in the now-defunct U.S. Open Internet rules that prohibited major Internet service providers like Comcast, Verizon, and AT&T from favoring some online services at the expense of rivals. Hastings’ blog post provoked a quick response from Comcast, which declared that no company has had a “stronger commitment to openness of the Internet than Comcast.”

Here’s the question: Should paid peering agreements between Internet content companies, bandwidth providers and broadband service providers be covered by net neutrality rules? In its 2010 Open Internet order, which was struck down by a federal judge in January, the Federal Communications Commission made clear that wasn’t the case. The timing of Hastings’ post is not arbitrary: Friday is the deadline for filing comments in the FCC’s Open Internet docket, which is designed to remedy the recent court defeat.

The FCC’s order, which only applies to the “last mile” connection into consumers’ homes, specifically exempted “existing arrangements for network interconnection, including existing paid peering arrangements,” which means that the interconnection deal struck by Comcast and Netflix last month is not covered by the rules. Still, some net neutrality advocates want to make paid peering deals a net neutrality issue, and Hastings appears to be appealing to that constituency.

In his blog post, Hastings drew a contrast between what he called “weak” net neutrality, which is how he described the FCC’s recently overturned rules, and “strong” net neutrality,” which he said would prevent ISPs from “charging a toll for interconnection to services like Netflix, YouTube, or Skype, or intermediaries such as Cogent, Akamai or Level 3, to deliver the services and data requested by ISP residential subscribers.”

Internet service providers, Hastings asserted, “must provide sufficient access to their network without charge.” That proposition is anathema to the nation’s largest ISPs, which for years have expressed displeasure that they are obliged to deliver high bandwidth content — which often competes with their own video offerings — over the infrastructure they’ve spent billions of dollars to build. By suggesting that the nation’s largest Internet service providers connect Netflix to consumers “without charge,” the online video service is asking for special treatment, the ISPs say.

In his blog post, Hastings did not identify a policy solution to his company’s problem. One option would be for the FCC to reclassify broadband as a “telecommunications” service, which would allow it to establish “common carrier” regulations prohibiting the broadband giants from discriminating against rival services. It’s unclear whether this so-called “Title II” reclassification is what Hastings had in mind when he referred to “strong” net neutrality. A Netflix spokesperson did not immediately return a request for comment from TIME seeking clarification.

Hastings did say that Netflix is willing to pay ISPs for better service for consumers. Neither Netflix nor Comcast will disclose the financial details of their interconnection agreement, but Netflix has said that the amount is not “material” to its bottom line. But that’s just for Comcast. Netflix is concerned that now that it’s struck that deal, other ISPs like AT&T and Verizon will demand a similar amount, which could add up quickly. It’s no wonder Netflix CEO Reed Hastings has buyer’s remorse.

Despite the fact that paid peering agreements have been a standard feature of the Internet’s behind-the-scenes architecture for many years — and were explicitly allowed by the FCC — Netflix now wants to frame such deals in terms of net neutrality. “Some big ISPs are extracting a toll because they can — they effectively control access to millions of consumers and are willing to sacrifice the interests of their own customers to press Netflix and others to pay,” Hastings wrote. “Netflix believes strong net neutrality is critical, but in the near term we will in cases pay the toll to the powerful ISPs to protect our consumer experience.”

For its part, Comcast bristled at the suggestion that it was extracting an unjust “tax” from Netflix. “The Open Internet rules never were designed to deal with peering and Internet interconnection, which have been an essential part of the growth of the Internet for two decades,” David Cohen, Comcast’s executive vice president, said in a statement. “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.”

Netflix’s net neutrality outburst comes as federal and state regulators are scrutinizing Comcast’s proposed $45 billion deal to buy Time Warner Cable, which would create a broadband titan with unprecedented market power. (Time Warner Cable was spun off from TIME parent Time Warner in 2009.) As part of the proposed Time Warner Cable deal, Comcast will extend the commitment it made during its NBCUniversal review to abide by open Internet principles until 2018.

The latest flare-up between Netflix and Comcast underscores the ongoing shift in the commercial architecture of the Internet as consumers use increasing amounts of bandwidth. It also highlights the growing leverage held by broadband giants like Comcast in negotiations with content companies like Netflix. After the FCC’s Open Internet rules were struck down, the nation’s largest Internet companies were plunged into a period of uncertainty. It’s now up to the FCC to decide how it wants to proceed, and whether paid peering deals like the one struck by Comcast and Netflix will be covered by its rules.

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