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Comment by cmdrfred | Hacker News Reader

The thing is everyone has mobile phones for the most part. If a local ISP makes cost of doing business for Netflix so high that Netflix no longer offers that service at a reasonable price. Many consumers will either scale back their connection or cancel it entirely.

"What's the point of paying $100 a month for Facebook and Instagram? I get that on my phone anyway! I don't want Verizon's $100 a month TV plan, I want house of cards."

As the ISP mostly has sunk costs and slim margins if even 5% of its user base leaves in a certain market that will render them insolvent or force them to raise prices, causing more departures, and higher prices still...

The point is while they don't always have direct competition they do have a decent amount of elasticity of demand.

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Everyone has mobile phones, but not that many people have unlimited data and a high enough data rate to handle household streaming demands - usually you only get one or the other, and even "unlimited" usually hits a cap after a while. I don't think the elastic is as stretchy as you seem to be suggesting it is.

I understand they don't have unlimited data, but if they can't stream Netflix (insert your preferred service here) anyway what's the point of keeping the wireline internet service? Five gigs a month is a lot of Facebook/Snapchat and Instagram. Either way they won't have access to the content they want. Why not save a few dollars or move those dollars towards mobile data? Sure they can go to the ISP's media service but those are priced at the cable model for the most part and not really competitive, I don't know anyone under 40 that has cable service anymore. If you used to pay $15 for 4K high quality original content and now you are offered $60 a month for often low quality content with commercials would you take that deal? I'd pass.

A big cost for ISP's is customer acquisition, even if they change back their policies it will be years, maybe decades to recover. I think if an ISP did this on any large scale it would be suicide.

Under a lot of data plans, it'd still be cheaper for a moderate to heavy streaming video user to pay Comcast the vig it wants, than to pay wireless data rates for the same bandwidth.

I guarantee you Comcast has made the same calculation, too, down to the fractional cent. Whatever vig they charge, if they do, will be scaled accordingly.

The customer isn't paying the "vig" it's the distributor, If Netflix isn't profitable on Comcast's network Netflix will simply stop offering service to Comcast customers. They will have no other option, thus might opt out entirely as they go from moderate or heavy streaming users to not streaming at all.

Also keep in mind they would still be subject to anti-trust regulation, they really can only take it so far before getting broken up again.

> If Netflix isn't profitable on Comcast's network Netflix will simply stop offering service to Comcast customers.

So... just to make sure I'm following, this is the outcome you're arguing in favor of?

I'm arguing against the "sky is falling" hysteria that many seem to have about this. If you'll review the rest of the context of that quote you'll see why it's in Comcast's best interest to allow Netflix to do business with it's customers.

I don't believe I am expressing any kind of "sky is falling" hysteria. It's not as though the concept of monopoly, or the reasons why it's something to discourage, should be tremendously controversial in this day and age.

And Netflix raises subscription rates to make up for the added cost. The customer still pays the vig.

To: AllComcastCustomers

From: NetflixSupport@Netflix.com

Subject: Comcast is increasing the monthly cost of Nextflix

"Dear Valued Customer,

Here at Netflix we endeavor to offer the highest value for your entertainment dollar, it is with that in mind we regret to inform you that due to sweeping and punitive fee increases brought on at the sole discretion of Comcast we will be forced to raise our prices 425% next billing cycle. Customers of other ISP's will enjoy the same low price that we have always offered, in fact we are offering our service at our cost to Comcast customers at this new rate. Please contact Comcast customer service at 1-800-Comcast if you would like this issue resolved as it is out of our hands.

Have a great day"

At which point Comcast probably sues Netflix for anticompetitive practices.

"It was the shortest civil defence in the history of law. No experts. No witnesses. He simply stood up and proclaimed 'Pot, kettle, black, the defense rests.' ""

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