Netflix is again sounding warning bells about Comcast Corp.'s proposed purchase of Time Warner Cable.
In a letter to Sen. Al Franken (D-Minn.), who is one of the most vocal opponents of the deal, Netflix said a Comcast-Time Warner Cable marriage would put too much power over the Internet in the hands of one company.
Noting that a Comcast-Time Warner Cable combination would have a 40% share of broadband subscribers, including 19 of the nation's 20 biggest cities, Netflix Vice President Christopher Libertelli said the proposed merger "will result in online video content providers paying higher prices for access to Comcast customers or delivering poorer service to customers who depend on Comcast for broadband access."
Netflix was responding to a letter Franken sent the company last week seeking its input on Comcast's plans to acquire Time Warner Cable. Franken is on the Senate Judiciary Committee, which held a hearing about the sale two weeks ago.
In February, Netflix reached a deal to pay Comcast in return for a direct connection to the cable giant's broadband network. Previously, Netflix paid third-party providers for such access to Comcast's network.
But since that agreement, Netflix has been vocal in its criticisms of Comcast and suggesting that if it hadn't agreed to pay, its customers would have received an inferior product.
"By degrading consumers' experience, Comcast can demand that content providers pay them a toll to avoid congestion and reach their captive subscribers," Libertelli wrote. "If content providers cannot effectively reach Comcast subscribers, they cannot compete."
Libertalli added that working with the third-party providers resulted in "poor video quality for our members."
Comcast fired back that it has "a multiplicity of other agreements just like the one Netflix approached us to negotiate, and so has every other Internet service provider for the last two decades. And those agreements have not harmed consumers or increased costs for content providers — if anything, they have decreased the costs those providers would have paid to others."
Netflix's argument, Comcast cracked, is a "house of cards."
Follow Joe Flint on Twitter @JBFlint.
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