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Netflix blasts AT&T fiber network; opposes Comcast, TWC merger

The Netflix logo is is shown on an ipad in Encinitas, California, April 19,2013. REUTERS/Mike Blake
The Netflix logo is is shown on an ipad in Encinitas, California, April 19,2013. REUTERS/Mike Blake

By Marina Lopes

NEW YORK (Reuters) - Netflix Inc, the video streaming service, on Monday criticized AT&T's high-speed fiber network as inadequate and slow, while renewing its call for AT&T to interconnect directly with Netflix.

Netflix made the remarks in a letter to shareholders on its first-quarter results. The company has been calling for greater protections for open Internet rules, also known as net neutrality, which require Internet service providers to give consumers equal access to all lawful content without restrictions or tiered charges.

Netflix, in a letter signed by its chief executive, Reed Hastings, and chief financial officer, David Wells, said AT&T's fiber-based U-verse service has "lower performance than many DSL" Internet service providers.

The letter came hours after AT&T said it expects to expand its fiber network and TV services to up to 21 U.S. cities.

AT&T did not immediately respond to requests for comment.

In a March blog post, AT&T dismissed Netflix's call for free interconnection as an "arrogant" and unfair attempt to force others to pay for the content provider to gain access to faster broadband speeds and better services.

"The 249 customer comments on AT&T's anti-Netflix blog post indicate that AT&T customers expect a good quality Netflix experience given how much they pay AT&T for their Internet service," the Netflix letter said.

Netflix added that AT&T can connect directly with Netflix for free, saying that doing so would "quickly improve their customers' experience."

Netflix also addressed wider tensions with the Internet service providers it relies on to distribute its services. The company said it opposes the proposed merger between Comcast and Time Warner Cable because it would give Comcast a monopoly over high-speed broadband and allow it to charge "unprecedented fees" from transit and service providers like Netflix.

AT&T, which is fighting rivals such as Google Inc as well as cable companies with its fiber-based product, on Monday said it is considering providing broadband Internet speeds of up to 1 gigabit per second and its U-verse television service in some metropolitan areas, including Chicago, Los Angeles and Miami.

Before the company can enter these markets, it must make agreements with local leaders in each city.

The services are currently available in Austin, Texas, and some surrounding communities, and will be rolled out in parts of Dallas this summer, the company said.

AT&T said it may consider expanding its reach to 100 cities eventually.

U-verse launched in 2006 and currently has 10.7 million combined Internet and TV customers.

(Additional reporting by Liana B. Baker; Editing by Leslie Adler)

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