Comcast slams Netflix over merger opposition

Comcast slammed Netflix for its opposition to the proposed $45 billion deal to combine Comcast and Time Warner Cable.

"Netflix's opposition to our Time Warner Cable transaction is based on inaccurate claims and arguments," the company said in a statement late on Monday.

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In a letter to shareholders on Monday, Netflix CEO Reed Hastings and CFO David Wells came out against the merger, saying it would give Comcast too much market power.

The letter pointed to a recent deal between Netflix and Comcast to boost the video streaming experience of Netflix users. That "interconnection" deal allowed Netflix to connect directly to Comcast's servers without going through a third party.

"Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix," Netflix's letter to shareholders said.

"The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers."

In its statement on Monday, Comcast hit back at Netflix, accusing the company of wanting to protect its own business model rather than the open Internet.

Netflix's opposition is "about improving Netflix’s business model by shifting costs that it has always borne to all users of the Internet and not just to Netflix customers," the Comcast statement said.

Comcast pointed to other interconnection deals, including through third parties, and said that Netflix approached Comcast as a way to cut down on interconnection costs.

"There is nothing unprecedented about our agreement with Netflix," the company said, citing deals between other Internet companies, like Yahoo and Google, and Internet providers.

Comcast also accused Netflix of conflating interconnection deals with net neutrality issues.

Earlier this year, a federal court struck down the Federal Communications Commission's net neutrality rules, which prevented Internet providers like Comcast from blocking or slowing access to certain websites.

Under conditions of Comcast's 2011 purchase of NBC Universal, the company is required to maintain net neutrality for its users until 2018.

"There has been no company that has had a stronger commitment to openness of the Internet than Comcast and we are the only [Internet provider] in the country that is currently legally bound by the FCC’s vacated Net Neutrality rules," the company said.

"In fact, one of the many benefits of our proposed transaction with Time Warner Cable will be the extension of Net Neutrality protections to millions of additional Americans."