In a broadside aimed directly at Comcast, Netflix devoted a section of its quarterly shareholder letter on financial performance to call the cable provider out for exempting the Xfinity On Demand Xbox video streaming app from its own broadband usage caps.

On page four of the letter under the bold headline “Internet Caps Should Apply Equally, or Not At All,” Netflix strongly criticized Comcast for working around the 250GB monthly residential limit. The letter pointed out the limit applies to Netflix, Hulu and HBO GO apps on Xbox, and implied that Comcast’s contention that its Xbox Live app somehow uses bandwidth differently is untrue.

“This is not neutral in any sense. The Xbox is a pure Internet device with a single IP address, works over a consumer’s home wifi, and data to the Xbox is Internet data,” noted Netflix CEO Reed Hastings and CFO David Wells in the letter. “When the Xfinity Xbox app uses lots of bandwidth, it competes for that  bandwidth with all other Internet usage and users in the home. The Xfinity Xbox app ‘speaks’ TCP/IP like any other Internet device.

“The only difference between the Xfinity Xbox data and Netflix Xbox data is the Xfinity data is favored by Comcast exempting it from the cap.”

The pair concluded: “Comcast could raise the cap and make it apply equally or just eliminate the caps. Net neutrality  principles mean a level playing field for all Internet applications.”

Last month, Comcast released the Xfinity Xbox app, noting the 250GB cap would not apply because, “the content is being delivered over our private IP network and not the public Internet.”

Previously: No Comcast bandwidth cap for on-demand Xbox video

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  • JBredux

    Could comcast just charge content providers extra for their content to exceed the cap or not apply to the cap. Then one division of comcast could pay the other division of comcast. This way it would apply equally to all content providers.

  • Guest

    When Comcast serves content from Comcast servers to Comcast subscribers over Comcast wires, that’s an intranet transfer. It’s like if you had two compus in your house and you copied a file from one to the other.

    When Netflix serves content from Amazon servers to Comcast subscribers over multiple wires, that’s an internet transfer.

    Intranet transfers are free for Comcast subscribers. Internet transfers are capped. Seems pretty logical to me, Reed.

    • guest

      Putting it that way seems logical, but if you believe the problem is internet transfers then why is it that there’s no cap on businesses accounts? Is it because they are charged more? Then let consumers pay the same as a business if they need it.

      I used to have verizon fios and there are no caps with them. Do you think that is because verizon fios has a bigger internet connection than comcast or because verizon has a fiber optic connection all the way to your home?

      • Guest

        Comcast never has any problem accepting my money. I slipped a few extra coins in my envelope last month and I’ve never been in violation of any “cap” since then. Give it a try!

  • SilverSee

    I subscribe to both Netflix and Comcast, and while I do like Netflix, I have to say this seems like grandstanding.

    Whereas Netflix, Hulu, et al, are available to anyone who subscribes to Comcast broadband, Xfinity is only available via Comcast’s cable TV network (meaning I have to also be a cable TV subscriber). Seems like a clear cut distinction to me.

    My understanding is that Comcast STBs also use “Internat data” for on-demand content via TCP/IP; is Netflix arguing that this content should also count against my broadband usage? The fact that the device (Xbox) has an IP connection in common with the broadband services is immaterial.

    In fact, by omitting Xfinity from my monthly broadband cap, Comcast is allowing me to use *more* bandwidth for over the top streaming services such as Netflix. Reed should be happy.

    • Guest

      And last time I checked, Reed is a MS Director. So maybe he should have made sure he had the details straight before bringing a MS product into the debate.

  • Nobody

    IP and Internet are different.  Allow companies to innovate with IP and stop grouping them together

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