It’s on: Time Warner Cable alleges that Netflix discriminates against its customers

Time Warner Cable (s twc) upped the ante in the dicey relationship between Netflix (s NFLX) and some of the country’s largest ISPs Wednesday, alleging that the video subscription service discriminates against Time Warner Cable customers. “Netflix is… closing off access to some of its content while seeking unprecedented preferential treatment from ISPs,” the company told Multichannel News.
The point of contention is Netflix’s recent launch of 3D and Super HD video formats. Netflix launched a limited number of 3D titles during CES last week, and also added the ability to stream many of its titles in Super HD — a better-looking 1080p HD format that features less compression, and thus higher bandwidth requirements, that Netflix’s regular 1080p streams.
Both 3D and Super HD are exclusively available to subscribers whose ISPs take part in Neftlix’s Open Connect CDN network, and the company is actively encouraging its subscribers to contact their ISPs and get them to adopt Open Connect.
This kind of customer-driven campaign apparently didn’t go over so well with Time Warner Cable. The company told Multichannel News that it is wrong for Netflix to “withhold any content formats” from Time Warner Cable Customers, adding: “Time Warner Cable’s network is more than capable of delivering this content to Netflix subscribers today.”
Of course, Netflix doesn’t exactly agree with this point of view. Netflix Chief Communications Officer Jonathan Friedland sent me the following statement via email:

“OpenConnect provides Netflix data at no cost to the location the ISP desires and doesn’t seek preferential treatment. We hope TimeWarner will join the many major ISPs around the world who are participating in Open Connect to reduce costs, minimize congestion and improve data delivery to enhance the consumer experience.”

As we wrote before, this conflict between Netflix and ISPs has been going on for some time, and it essentially comes down to peering arrangements. ISPs want big content providers like Netflix and Google (s GOOG) with its YouTube service to pay for traffic, but Netflix and Co. point out that consumers are already paying for their traffic.
These disputes have largely remained under the radar, but Netflix elevated the issue by tying it to its new video formats, and enlisting consumers in the process. It now looks like Time Warner Cable is responding with the same vigor it displays during cable TV carriage disputes.
The question is whether consumers will side with Netflix, or with their cable company.