Netflix CEO Q&A: Picking a fight with the Internet service providers

Reed Hastings recently stood before new employees packed into the company’s campus movie theater, pulled a gray hair from his head and held it up for all to see. A single fiber optic strand, as thin as that hair, could carry massive amounts of data — the equivalent of all of Netflix’s global video traffic at any given time, he marveled.

The co-founder of Netflix has been thinking much more about broadband providers these days, with his company spearheading a lobbying effort to get federal regulators to monitor how Internet service providers charge Web firms like his to move data around the Internet.

It’s a risky effort. Netflix, which gobbles up one-third of bandwidth during peak hours, doesn't think companies like theirs should pay extra to place its servers closer to the networks of Comcast and Verizon.

The issue reveals Netflix at an important turning point. It won kudos with television critics, nominated for 31 Emmys on Thursday. But it’s making enemies out of the companies it relies on most — the cable and telecom firms providing all those lightning-fast Internet connections as thin as his hair.

The following is an edited transcript of a recent interview in the “Hawaii Five-O†conference room at the company’s headquarters. Hastings had just returned from watching the U.S. play against Germany in an early World Cup 2014 match.