FCC Commissioner Michael O'Rielly said Tuesday that Netflix's recent admission that it stems video streaming data over some mobile networks is "deeply disturbing" and may warrant an investigation from the Federal Trade Commission. File photo by dennizn/Shutterstock
WASHINGTON, March 29 (UPI) -- A top official at the U.S. Federal Communications Commission said Tuesday that he finds Netflix's recent admission that it intentionally bottlenecks video streaming data over some mobile networks "deeply disturbing."
Michael O'Rielly, one of the agency's five commissioners, said the streaming service's practice of undisclosed throttling -- cutting down a video's quality and data load without telling customers -- might even warrant an investigation by the Federal Trade Commission.
"There is no way to sugarcoat it," he said during a speech Tuesday at the American Action Forum. "The news is deeply disturbing and justly generates calls for government and maybe even congressional investigations."
Last week, Netflix acknowledged that it has indeed downgraded video streaming over some mobile networks.
"In an effort to protect our members from overage charges when they exceed mobile data caps, our default bitrate for viewing over mobile networks has been capped globally at 600 kilobits per second," Netflix stated on its company blog last week.
O'Rielly, a New York Republican whose FCC term expires in 2020, said Netflix didn't violate any federal net neutrality rules -- which bar service providers from discriminating against certain content or websites -- because it can't.
"The company and net neutrality advocates have been vehement in stressing that the net neutrality rules only apply to [service providers], not standalone edge providers, such as Netflix," he said. "So there is no net neutrality violation to explore."
"I predicted this would occur sooner or later," he continued, noting that subjecting all Internet entities to the rules, not just service providers, would be a "colossal mistake."
Nonetheless, O'Rielly said he finds the company's admission concerning.
Reed Hastings, Netflix co-founder and CEO, delivers the Keynote Address during the at the 2016 International CES, a trade show of consumer electronics, in Las Vegas, Nevada, January 6, 2016. File photo by Molly Riley/UPI
"[Netflix's] admission and activities raise at least two critical areas that demand Commission attention," he continued. "First, a company cannot knowingly make misrepresentations and inaccurate statements before the Commission. ... It appears that Netflix made accusations of wrongdoing by ISPs, all the while knowing that its own practices were one of the causes of consumer video downgrading."
"Second, we must all acknowledge that Netflix was not some passive participant when it came to
the formation of [the rules]," O'Rielly's statement reads. "Yet, at the same time it was making these claims, Netflix, itself, was engaged in highly suspect behavior.
"We owe it to consumers to treat their dollars with respect and to double- and triple-check our assumptions about complex marketplaces rather than getting locked into a regulatory tunnel vision that will ultimately leave consumers with fewer, more expensive choices."
In its statement last week, Netflix said its customers don't mind the capped mobile data they have been receiving.
"Many members worry about exceeding their mobile data cap, and don't need the same resolution on their mobile phone as on a large screen TV to enjoy shows and movies," it said.
Netflix was a major proponent of establishing net neutrality rules last year -- and still is today.
"We believe restrictive data caps are bad for consumers and the Internet in general," Netflix's blog post said.
Not all mobile networks were affected by the data cap, including Sprint and T-Mobile. AT&T, which was impacted, reacted harshly to Netflix's admission.
"We are outraged to learn that Netflix is apparently throttling video for their AT&T customers without their knowledge or consent," the carrier told the Wall Street Journal.