Could there be more fees in the future for Netflix users?
Packages of DVDs await shipment at the Netflix.com headquarters in San Jose, Calif.
TEXT OF INTERVIEW
JEREMY HOBSON: Comcast is slapping new fees on Level 3 communications -- that's the company that helps Netflix stream video to customers. The new fees could increase the price we pay to stream movies online.
For more on this let's go live to Comcast's home city of Philadelphia where our own Gregory Warner is covering this story. Good morning Gregory.
GREGORY WARNER: Good morning Jeremy.
HOBSON: So Comcast is trying to charge Netflix's partner Level 3 communications more fees. Explain what this fight is about.
WARNER: So, every night between 8 and 10 pm, Netflix movies represent over 20 percent of Internet traffic in America. And this fight is about how all those movies get from Netflix servers to your screen. And there's two sides to this debate. If you talk to Level 3 communications. they would argue that Comcast is setting up a tollbooth on the Internet. Comcast is worried about loosing cable subscribers as customers turn off their TVs and turn on their laptops to watch online movies.
HOBSON: So that's one side of the argument, what's the Comcast argument?
WARNER: Well, Comcast says this is not about movies, its about bandwidth, especially during those high-traffic, after dinner hours. Comcast would say that transmitting all that data takes infrastructure, infrastructure costs money, and Level 3 should pay for it.
HOBSON: What's at stake here, beyond just Comcast and Level 3 Communications?
WARNER: Well, first it's how much you pay for your online movies. Netflix just announced a new pricing structure last week to shift customers away from DVDs and towards streaming, so Netflix subscribers could feel the ripple affects from any new Comcast fees. The larger issue though is exactly this conflict of interest where in a sense Comcast gets to charge fees to a content competitor. And that debate is one that the FCC will take up in a few weeks, when they meet in Washington.
HOBSON: Marketplace's Gregory Warner in Philadelphia for us this morning. Thanks Gregory.
WARNER: Thank you Jeremy.