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Netflix Comes Out Against The Comcast-Time Warner Deal

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REED HASTINGS
Reed Hastings, chairman, president and chief executive officer of Netflix Inc., listens during a Broadcasting Board of Governors (BBG) panel discussion in Washington, D.C., U.S., on Wednesday, Dec. 18, 2013. Technology company executives including Hastings left a meeting with President Barack Obama yesterday with no commitment to limit government snooping on Internet traffic, according to an industry official briefed on the session. Photographer: Andrew Harrer/Bloomberg via Getty Images | Bloomberg via Getty Images

Add Netflix to the ranks of those opposed to a Comcast-Time Warner Cable union.

In a letter to shareholders on Monday, the company formally came out against the proposed merger between the cable giants.

If approved, "the combined company’s footprint will pass over 60 percent of U.S. broadband households...with most of those homes having Comcast as the only option for truly high-speed broadband," Netflix CEO Reed Hastings and Netflix CFO David Wells wrote in the letter to shareholders. "The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers. For this reason, Netflix opposes this merger."

The statement comes less than two months after Netflix agreed to pay Comcast for access to its high-speed network to improve the video quality and loading speed for Netflix streaming customers. It also follows a strongly worded blog post by Hastings in March grousing about Internet service providers charging for faster speeds.

In his March post Hastings wrote that "while in the short term Netflix will in cases reluctantly pay large ISPs to ensure a high quality member experience, we will continue to fight for the internet the world needs and deserves." Monday's letter also mentioned that Netflix would be raising prices for new subscribers to the service.

"Internet interconnection has nothing to do with net neutrality," Jennifer Khoury, senior vice president of corporate and digital communications for Comcast said in a statement. "It’s all about Netflix wanting to unfairly shift its costs from its customers to all Internet customers, regardless of whether they subscribe to Netflix or not."

It's clear that Hastings and Netflix have a lot at stake in the future of net neutrality and the potential mega-merger between Comcast and Time Warner Cable. Consumers also have reason to be concerned: Last year the two companies were the lowest-scoring cable companies in the American Customer Satisfaction Index, mainly because of the weakness of their customer service.

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