Netflix, Inc. (NASDAQ:NFLX) has an issue with internet service providers over data caps which it says are unreasonable and unfair. The Los Gatos streaming service is now urging the Federal Communications Commission (FCC) to halt the practice with immediate effect. Reports by Verge indicate that Netflix which is one of the favorite ways to watch movies and television online sent a letter to FCC expressing its annoyance in the Internet Service Providers who are offering data plans
The use of data plans according to Netflix dampens people’s passion from using broadband services or watching Internet-based television because they may not afford the 300 monthly gigabytes. The situation left many households impeded because they cannot look at the television in the manner that they prefer. In its letter, the company says that they are not serving a legitimate purpose. Instead, the Internet Service Providers are just scooping money from their customers.
But why is the use of data plans such an issue to Netflix?
Comcast Corporation (NASDAQ:CMCSA) is one of main Internet Service Providers that is under Netflix’s attack. However, it maintains that the use of data caps is fair and handy. It further claims that more money is only charged on those who are using more data unlike what Netflix says. .However, Netflix still has an issue with this with a clear opinion that a person should be given the ability to watch as many television show episodes as they want.
Nonetheless, the biggest fear within Netflix is that the more widespread the use of data caps becomes, the more people will cancel their Netflix subscription which of course is a loss to the company. On the other hand, FCC has also revamped the top-box plan which requires all cable companies to provide streaming app for their subscribers an idea that Netflix does not own up.
It is not clear how much more effort Netflix will need to put into this stalemate, but as that unfolds, other legacy media companies are throwing in their expertise in other areas the likes of new distribution channels, and the creation of new types of programming. Competition is rife.