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Netflix wants faster speeds for its content

Netflix's recent agreement to pay Comcast for faster delivery of its streaming content has opened the floodgates for other similar deals to come through with different ISPs. 

According to Reuters, Netflix is in talks with both Verizon Communications and AT&T regarding quicker speeds for Netflix movies and TV shows. This would mean extra fees paid by Netflix, but a better Netflix experience for customers using either Verizon or AT&T's Internet services. 

Verizon Communications CEO Lowell McAdam said Monday that Netflix is expected to pay the company fees for faster delivery of content on Verizon's FiOS service, but that the two companies have already been in negotiations for a year now. The Comcast deal could potentially speed the process up, though, at this point. 

"It shows you don't necessarily need a lot of regulation in a dynamic market here. Doing these commercial deals will get good investment and good returns for both parties," said McAdam.

AT&T spokesman Mark Siegel also said Monday that talks are ongoing between his company and Netflix in regards to boosting speeds for the streaming service -- but for a fee, of course.

 
[SOURCE: Mashable]

Netflix is hoping for a more direct connection to both Verizon and AT&T's networks so that it doesn't have to use third-party companies as middlemen anymore. This method proved to be costly and resulted in traffic congestion through the networks, giving Netflix users subpar video experiences at times. 

But an interconnect agreement, which would allow Netflix direct access to Verizon or AT&T, would relieve such congestion and offer better experiences for viewers. 

Netflix made such an agreement with Comcast earlier this week, agreeing to pay fees to the big cable provider in exchange for faster speeds. 

While it's not clear how much Netflix is paying Comcast, the new deal will span several years and Comcast said it would connect to Netflix's servers at data centers operated by other companies. 

Before this agreement, Netflix wanted to connect its own specialized servers to the networks of big cable providers in order to improve streaming. But Netflix didn't want to pay for such connections, and big cable like Comcast wanted fees because they'd be carrying Netflix's heavy traffic.  

Comcast acquired Time Warner Cable earlier this month for $45.2 billion, cementing its dominance as the top broadband provider in the U.S. 

Source: Reuters



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Seems a bit misleading.
By therealnickdanger on 2/25/2014 10:01:30 AM , Rating: 3
It's not as simple as bandwidth. As part of Netflix's so-called "Open Connect" program, the ISP would host the physical appliances and pay for the maintenance, energy costs, and bandwidth themselves. See this guide for all the details.

http://oc.nflxvideo.net/docs/OpenConnect-Deploymen...




RE: Seems a bit misleading.
By CaedenV on 2/25/2014 10:09:43 AM , Rating: 4
Exactly. Netflix is not giving in on paying the bandwidth toll, they are essentially offloading content to ISPs so that bandwidth is irrelevant as it would stay 'in house' on an ISP's internal network rather than ever hitting the internet.

The point is that they will be paying maintenance and upkeep on these mini servers, and paying less to their own ISP. In the end I think Netflix is going to win out here. A little more maintenance, a little less ISP costs, and a much better experience for customers. A good deal all around.


RE: Seems a bit misleading.
By Motoman on 2/25/2014 10:53:12 AM , Rating: 2
No, in the end it means the only content providers you'll have access to are the ones who want to pay this money to certain ISPs.

And if, say, Steam does this with Comcast but you're on Verizon, Verizon isn't going to care that your Steam games keep disconnecting, etc.

This is starting a bidding war whereby the only content providers who will eventually reliably get to your eyeballs will be the ones who pay big money to the ISPs.

Your eyes are being bought.


RE: Seems a bit misleading.
By Motoman on 2/25/2014 10:56:59 AM , Rating: 5
Furthermore, now that Comcast has a massive financial incentive to make sure that Netflix remains profitable, what incentive do they have to provide good throughput for Amazon streaming, or Hulu or Redbox or anything else?

In fact, is it not now firmly in their interest to *decrease* the performance of competing VOD services? And granted that there's no Net Neutrality regulation in play...they can f%ck with those other services all they want to. Including just blocking access entirely if they like.

Comcast now needs to make sure that Netflix is the VOD service that ALL of their customers use...because if any of their customers use other VOD services, that's a user that they're not getting Netflix money for.

In what possible world is that "good" for anybody besides Comcast and Netflix?


RE: Seems a bit misleading.
By Reclaimer77 on 2/25/2014 2:41:49 PM , Rating: 1
Enter crazy conspiracy man. Who's connecting dots that aren't there, and providing zero evidence of his claims.


RE: Seems a bit misleading.
By Solandri on 2/26/2014 4:44:56 AM , Rating: 2
If the market were competitive, Comcast would be paying Netflix for the privilege of hosting the servers locally. Comcast would want a competitive edge over other ISPs, and faster Netflix service would be one way to gain that. So they would be willing to pay Netflix.

That's the real problem with all this (and why net neutrality is needed). The ISP market isn't competitive due to nearly all of them being government-granted monopolies. Allowing them to sell access as if it were competitive leads to all sorts of market distortions like we're seeing here. Netflix paying Comcast instead of the other way around.


RE: Seems a bit misleading.
By sgestwicki on 2/28/2014 3:27:30 PM , Rating: 2
I think the government sponsored monopolies is exactly why net neutrality is not needed. People just need the opportunity to ditch their horrible ISP if they want to and the free market should take over and protect everyone. If the government sponsored monopolies go away and it is still a problem, that is when net neutrality can come in. But for heavens sake, let people have the opportunity to get away from Comcast or any ISP if they want.


RE: Seems a bit misleading.
By NellyFromMA on 2/25/2014 12:06:47 PM , Rating: 1
Basically we've exceeded the capability of the aging and antiquated US network infrastructure while countries overseas with superior networks laugh at how silly this notion really is.

Netflix is paying ISPs to upgrade their inferior networks so that they can survive mid-term growth.

It's actually the exact reason why this industry in America is flawed much to the detriment of our society. But hey, a nice and slow network means the gov can keep track of 100% of transmitted data much easier and cheaper too.


RE: Seems a bit misleading.
By Reclaimer77 on 2/25/2014 3:02:03 PM , Rating: 1
Slow network? I'm happy with my 50mbit line with no peak-hour slowdowns thank you.

As I've pointed out before, those countries with better infrastructure are usually the size of a single state.

People seem to be interpreting this deal to suit their ideology instead of the facts. Do you realize how much traffic Netflix is responsible for?


RE: Seems a bit misleading.
By SatchBoogie1 on 2/25/2014 10:19:46 AM , Rating: 2
Regardless, we will most likely see an increase in our monthly bill soon. I understand that they have to continue improving ways to deliver the content to the end user, and this would be the trade-off.


RE: Seems a bit misleading.
By Spuke on 2/25/2014 11:55:52 AM , Rating: 2
It's $8 right now, even if they raised it $5 it's only $15 a month for nearly unlimited usage of EVERYTHING they have. Name one content provider that has anything even remotely close to that. Plus now you'll get better access to that content. And Hulu? Hulu sucks. And Amazon has the loot to do the same thing if it wishes too compete.


RE: Seems a bit misleading.
By sgestwicki on 3/3/2014 7:04:39 PM , Rating: 2
Your math is a little off. If they jump it from $8 to $15 it will be almost double the cost. It would be like they did when the broke the streaming and DVD service but charge what the bundle did cost for each one. It just sucks when something that you like quadruples in cost over just a few years.


RE: Seems a bit misleading.
By dgingerich on 2/25/2014 10:47:04 AM , Rating: 2
Well, with the increase in usage across the Internet due to digital media, costs were bound to rise. Either we pay more for the digital media service ourselves (through a rise in cost for subscription for services like Netflix) or we pay for it through higher costs for our internet connections. We pay for using more of it one way or another. There is no way around it.


Dangerous Precedent
By aldenf on 2/25/2014 11:21:21 AM , Rating: 3
As a small business owner, I am a capitalist and believe in a fair product or service for a fair price...

If this is Netflix simply reducing it's own traffic burdens and paying the ISPs to carry it for them; and it remains cost-neutral to the consumer, I can support it.

If this is Netflix paying a fee for an app to be placed on set-top boxes as a value add-on for it's customers, I can also support it. I would think a majority of Americans don't want to bother cabling a computer to their televisions and are willing to pay for the convenience of an app.

If this turns out to be a way for the telecoms to stick their hands further into consumers' pockets, for Netflix WILL (has to) pass on any additional costs to it's customers, I vehemently oppose it.

Americans already pay telecoms more money for less throughput than the average industrialized nation. Is it too much to expect that consumers be allowed to utilize the throughput they already pay for, in the way they choose, without the ISPs tampering with certain traffic?

Internet access is bordering on, if not entered, the basic utilities domain. This is why municipalities are trying to roll out affordable service to the under-served, often at taxpayers' expense.

Telecom models in general, especially those of television/cable companies, have been broken for years. ISPs throttling certain traffic until additional fees are paid is bordering on extortion, particularly when the delivery service, at a specific throughput, is already being paid for by consumers.

While I'm generally not a fan of the government getting involved in private commerce, it's time that net neutrality become an official reality.




RE: Dangerous Precedent
By Rukkian on 2/25/2014 12:12:33 PM , Rating: 2
None of it would be an issue if there were options. Unfortunately due to government intervention, there are monopolies in many communities, so the end user does not have a choice. If an internet provider shuts down access to competing services, there is nothing many can do about it.

If, as you said, it is simply a measure that does not cost more for Netflix, or is saving money, I am all for it.

If it is the first of a new extortion racket by Internet providers, then something needs to be done to stop it.


RE: Dangerous Precedent
By aldenf on 2/25/2014 12:43:10 PM , Rating: 2
Agreed. As I posted in another thread, I ultimately don't see the problem...

If port-peering is the issue, then bypass it completely in a way that negligibly effects consumers.

Netflix already assumes the costs for the bandwidth from/to its data centers and pays to install, maintain and upgrade them. Most ISPs offer paid hosting in their data centers.

If Netflix pays an ISP to host their content, it bypasses port-peering to the ISP's customers and takes the traffic off the internet as it never leaves the ISP's network. Netflix frees up resources it currently assigns to their data centers (including bandwidth costs) and reassigns said resources to pay the ISP.

The ISP makes a fair profit for the hosting and bandwidth. Netflix improves its services at a nominally higher cost to its customers.

As 4K content proliferates, customers pay a premium to access it.

There is usually a win-win solution to most problems. When individuals or businesses succumb to ugly greed, those win-win situations tend to evaporate.


This is very, very bad
By Zak on 2/25/2014 12:24:42 PM , Rating: 2
It sets a precedent that will have a very negative impact on the future of the internet.




Internets
By seamonkey79 on 2/25/2014 1:14:32 PM , Rating: 2
My internets got stuck behind a dump truck again. Don't they know that when too many internets travel through the series of tubes, they can be slowed down?

...only now it's the provider slowing it down instead of actual usage slowing it down. Arbitrarily slowing down bandwidth because (while I pay you already) I use a different service than another one you provide (which I also pay for as part of my bundled TV service) is downright evil. You are now triple-dipping... I pay you for internet, I pay you for TV, and now you want to be paid for me using a third service through one of yours.

I hate government intervention on a base level, but when companies just go out of their way to start screwing everyone over, I sadly have to start supporting it... and that makes me even more angry with the 'service' provider.

You should not be able to discriminate on the speed of service, regardless of what I'm looking at. You should be a pipe, a big pipe that I pay a bunch of money for.




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