Netflix Agrees to Pay Comcast to End Traffic Jam
February 24, 2014 10:00 AM
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While it's not clear how much Netflix is paying Comcast, the new deal will span several years
Comcast recently cemented its dominance as the top broadband provider in the U.S. after its planned acquisition of Time Warner Cable (TWC). And with a customer base that large, Netflix doesn't want to miss out.
, Netflix has agreed to pay the big cable provider to ensure that its movies and TV shows stream easily without traffic jams on Comcast's broadband network.
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.
This means a less-congested streaming experience for Netflix customers using Comcast cable connections, and Comcast gets to collect fees for providing the service.
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
So Netflix traditionally used middle companies for connections, but it had to pay these middlemen to do so anyway. There were also traffic congestion problems with this route, which slowed connections for customers. Netflix likely thought it made more sense to just give in and pay the big cable company (Comcast) for direct connections to its broadband network, and to ensure that Netflix content is delivered smoothly.
This is a big step between big cable and internet streaming companies, as it means Netflix is more likely to offer similar deals with other major cable companies.
earlier this month for $45.2 billion, serves 32 million households in the U.S. With the company having such a dominant position in the U.S. cable market, it could be a good idea for Netflix to jump onboard and please both current and potential customers with better service.
Netflix has over 30 million subscribers in the U.S.
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RE: I swear
2/24/2014 10:52:00 AM
Call your representatives and demand net neutrality. This is what happens without net neutrality. Online services that threaten core businesses of broadband providers are relegated to slow network paths... unless they pay up. When Netflix pays up YOU will pay up.
The inevitable outcome of an internet without net neutrality is the same outcome we currently have with television. Pay for internet packages that include fast access to certain things and slow access to others. Pay more for faster access to more things. It hasn't taken long for Verizon and Comcast to start throttling and it will only get worse.
This is going to destroy the internet. We need to demand that broadband providers be classified as common carriers and treat all traffic equally.
RE: I swear
2/28/2014 3:13:41 PM
A much better idea than net neutrality is competition. Comcast has lost millions of subscribers in the north east to Verizon FIOS because people are fed up with the company. Instead of sticking more government rules that run the risk of unintended consequences we should be demanding that the government sponsored monopolies be destroyed.
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