Netflix has formed its own political action committee called Flixpac, and my sources indicate that the biggest issues it plans to tackle will be how to let folks share their movies on social networks and the more nuanced issues of broadband competition, network neutrality and what defines television in an IP age. The first issue requires straightforward lobbying to change the Video Protection Privacy Act (VPPA), while the second issue is one that will require the strategic planning of a continental invasion.
In terms of Flixpac details Politico reported on Saturday that Chris Libertelli, head of government relations at Netflix, is listed as the treasurer on the paperwork to create a PAC and it speculated that the PAC would act in part to protect against attacks such as the Stop Online Piracy Act or Protect IP Act. It also mentioned the VPPA. Ars Technica has Netflix’s agenda correct with a focus on VPPA and network neutrality while Forbes suggested that it might also try for favorable postage. Netflix spokesman Joris Evers emailed me the following when I asked about the PAC: “A PAC is commonplace for companies that lead a big, growing market and Netflix is no exception.”
Netflix has been growing its spending in DC in the last two years, but has been fairly silent on many of the big issues related to network neutrality and things like broadband caps. When Netflix hired Libertelli, who had previously handled government relations for Skype, and who is a former staffer at the FCC, I had hoped to hear more talk and activism from the company. But I was disappointed. With the creation of the PAC, which will allow Netflix to contribute up to $ 5,000 per election to a federal candidate, I’m hopeful we’ll see a more activist Netflix. Both in terms of supporting candidates, but also in filing comments with the FCC and in behind-the-scenes education of Congress.
So about that Flixpac agenda.
In conversations with insiders in DC and at Netflix, the video streaming service’s agenda has become clear. Get rid of the Video Protection Privacy Act and help push an agenda to keeps content flowing across the web. Issues such as Comcast not counting video streamed via the Xbox against its cap and the Verizon deal to buy spectrum from the cable companies all have implications for Netflix’s business model. In the first example it brings up the issues of creating what essentially becomes a private version of the Internet to sling Comcast video on demand content around in a manner that won’t penalize the consumer for streaming.
From Netflix’s perspective this becomes a problem because users that want to watch Netflix content have a potential tax on it, in the form of going over their broadband cap and getting cut off. Streaming Comcast’s video content over the Xbox does not come with that same penalty, which could lead users to prefer Xfinity over Netflix, for reasons that come from Comcast owning the last mile pipe that enters people’s homes. The issue of and problem of vertical integration in the broadband world becomes even more troubling as the spectrum agreement between Verizon and the cable companies threatens to tie the wireline and wireless world together.
As I’ve said in previous posts, the idea of the Joint Operating Entity proposed by Verizon and the cable companies as a way to develop and share technology could become a way to create technical hurdles that will link the cable networks to Verizon’s wireless network in ways that could limit competition. An obvious way this might play out for Netflix would be in the creation of a service that lets a cable customer stream cable content over the wireless network without worrying about Verizon’s data caps.
That’s a theoretical today, but it’s not far fetched to imagine given the moves ISPs have made so far to reap the benefits of broadband while also ensuring their own pay TV business don’t get thrown under the over-the-top bus. The question is: Can a Netflix PAC help create a broadband future that benefits Netflix and consumers in the long-run?
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