Comcast Deal May See Netflix Start Paying Verizon, AT&T
February 25, 2014 9:29 AM
Netflix wants faster speeds for its content
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.
, 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.
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
acquired Time Warner Cable
earlier this month for $45.2 billion, cementing its dominance as the top broadband provider in the U.S.
“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls
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