FCC Chairman Tom Wheeler said Thursday the commission will not investigate video streaming giant Netflix despite an admission from the company that it degraded picture quality and slowed the streaming speeds for customers of two major U.S. wireless carriers.
As reported by Reuters, Wheeler said Netflix’s actions as an “edge provider” fall outside the FCC’s jurisdiction to enforce net neutrality rules passed by the commission last year.
Wheeler’s statements Thursday were supported by previous assertions made by Commissioner Michael O’Rielly during a speech given before the American Action Forum on Tuesday.
Though O’Rielly said Netflix’s practices were “deeply disturbing” and “justly generate calls for government – and maybe even Congressional – investigations,” he stressed that there was “no net neutrality violation to explore.”
“While the Federal Trade Commission may have grounds to scrutinize Netflix’s video throttling, let’s accept the factual point that Netflix never violated the (FCC)’s net neutrality rules enacted last February,” O’Rielly said.
The news comes on the heels of a confession from Netflix last week that it has been lowering the quality and speeds of video to multiple wireless carriers worldwide for more than five years. The news was originally reported by the Wall Street Journal.
In the U.S., Netflix said it throttled video speeds for customers of AT&T and Verizon, capping the streams at 600 kilobits-per-second. However, Netflix said it did not slow streaming speeds for customers of Sprint and T-Mobile, which it said have “more consumer-friendly policies.”
The news caught some by surprise, as Netflix CEO Reed Hastings was a vocal proponent of the FCC’s net neutrality rules that prevent providers from blocking or slowing Internet traffic.
Netflix cast its actions as an attempt to help consumers avoid overages on their data plans, but the policy has sparked a backlash across the industry for its lack of transparency.
AT&T senior executive vice president of external and legislative affairs Jim Cicconi told the Wall Street Journal the carrier was “outraged” that video streams were throttled for AT&T customers without their “knowledge or consent.”
Consumer Action’s executive director Ken McEldowney said Netflix’s practice was also unfair to broadband providers, who would catch the brunt of consumer dissatisfaction.
“Most consumers that encounter video playback issues are likely to unfairly place the blame on their broadband providers,” McEldowney said. “In fact, the Netflix admission came out because one mobile carrier incorrectly claimed that two of its major competitors were slowing customer’s viewing speeds. Surely there was a better way to ‘help’ consumers than by secretly slowing their streaming video entertainment and in doing so, casting aspersions on Internet service providers.”