Netflix Agrees to Pay Comcast to End Traffic Jam
February 24, 2014 10:00 AM
comment(s) - last by
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 12:34:02 PM
You're not seeing the charges to Netflix because of throttling, I imagine it's because Netflix wants to directly connect it's servers into Comcast's network so you can bypass all of the links between Netflix's servers and Comcast's pipes. This will probably reduce Netflix's ISP bills as well because they don't have to pay any extra bandwidth charges to reach Comcast's customers. They'll be wired straight into their data centers and everyone will get buttery smooth connections without Comcast having to upgrade any of their outbound pipes.
Comcast just charges because they know this will generate oodles of traffic on their network, and I think Netflix and other streaming networks account for a major portion of world internet bandwidth consumption. This means Comcast will eventually need to upgrade it's pipes and boxes to keep up with demand.
RE: I swear
2/24/2014 1:00:11 PM
You're missing the point. A content provider agreeing to pay an ISP for port-peering is a horrible precedent to set.
"We basically took a look at this situation and said, this is bullshit." -- Newegg Chief Legal Officer Lee Cheng's take on patent troll Soverain
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