Netflix announced yesterday that it would be coming to Australia and New Zealand on March 24th, and within the first 200 words, the company abandoned its principled stand on net neutrality. As GigaOm first reported, Netflix announced a special deal with Australian ISP iiNet to exempt its traffic from broadband data caps. Remember: Netflix lobbied hard for net neutrality — so hard it even helped change the FCC's definition of it. And zero-rating schemes like Netflix's new deal with iiNet (or like T-Mobile's controversial music freedom program, or AT&T's "sponsored data" program) clearly violate the principles of net neutrality. So was Netflix lying to its customers and the public about its stance the whole time?
Netflix did not respond to our request for comment by the time this story was published, but just consider what Netflix CEO Reed Hastings said on Facebook last April:
Comcast no longer following net neutrality principles.
Comcast should apply caps equally, or not at all.
I spent the weekend enjoying four good internet video apps on my Xbox: Netflix, HBO GO, Xfinity, and Hulu.
When I watch video on my Xbox from three of these four apps, it counts against my Comcast internet cap.When I watch through Comcast’s Xfinity app, however, it does not count against my Comcast internet cap.
For example, if I watch last night’s SNL episode on my Xbox through the Hulu app, it eats up about one gigabyte of my cap, but if I watch that same episode through the Xfinity Xbox app, it doesn’t use up my cap at all.
The same device, the same IP address, the same wifi, the same internet connection, but totally different cap treatment.
In what way is this neutral?
Netflix is now voluntarily participating in the exact thing it has ostensibly been fighting for more than a year. And bragging about it! Here's what Netflix's Director of Business Development, Paul Perryman, said about the deal in iiNet's press release:
Working with iiNet to offer quota-free Netflix content gives more people in the country the opportunity to familiarize themselves with who we are and what our service offers. We're confident that Australian audiences will love Netflix and we're looking forward to shaking things up in the local subscription TV market.
It's a flip-flop even Frank Underwood couldn't make with a straight face, especially coming on the heels of last week's major net neutrality victory in the US. Where do you really stand, Netflix?
Update, 3:09PM: Netflix responded to our story with the following comment:
Zero rating isn't great for consumers as it has the potential to distort consumer choice in favor of choices selected by an ISP. We'll push back against such efforts, but we won't put our service or our members at a disadvantage.