Netflix is blaming Comcast for recent subscriber loss

Why did Netflix decide to cave in and pay Comcast for a better direct connection to its network? Because apparently slow Netflix streaming on Comcast was costing the company customers. CNN reports that Netflix this week explained to the Federal Communications Commission that the quality of Netflix streams on Comcast had become so poor that the company had no choice but to pay up for a better connection. “For many subscribers, the bit rate was so poor that Netflix’s streaming video service became unusable,” Netflix told the FCC. “Some of them canceled their Netflix subscription on the spot, citing the unacceptable quality of Netflix’s video streams and Netflix’s inability to do anything to change the situation… We had to do something to make the congestion stop.”

Why did Netflix pay Comcast to stream its videos faster? Because Netflix was losing customers. That’s according to a petition Netflix filed to the Federal Communications Commission this week in opposition to Comcast’s (CMCSA) proposed mega-merger with Time Warner Cable (TWC). In February, Netflix reluctantly agreed to pay Comcast to directly connect to its network. Prior to the direct connect, Netflix delivered its videos to Comcast customers via third parties, including Cogent Communications (CCOI). But Comcast customers experienced abysmal Netflix speeds — among the worst in the country. Netflix speeds became so slow in December 2013 and January 2014 that customers grew irate, Netflix said in its petition. Calls made to Netflix’s customer support center about slow-loading videos more than quadrupled during those months. “For many subscribers, the bit rate was so poor that Netflix’s streaming video service became unusable,” the company said. “Some of them canceled their Netflix subscription on the spot, citing the unacceptable quality of Netflix’s video streams and Netflix’s inability to do anything to change the situation.” “We had to do something to make the congestion stop,” the company added.