Netflix pays Comcast for better connection

Comcast and Netflix have agreed what they describe as “a mutually beneficial” interconnection agreement that will provide Comcast’s broadband customers with a high-quality Netflix video experience for years to come.

The pair say that working collaboratively over many months, they have established a more direct connection between Netflix and Comcast, similar to other networks, that is already delivering an even better user experience to consumers, while also allowing for future growth in Netflix traffic. Netflix receives no preferential network treatment under the multi-year agreement, terms of which are not being disclosed.

The announcement is evidence of a shift in the balance of power in favour of Internet access providers following a an Appeal Court ruling mid-January that eliminated net neutrality rules that prohibited Internet providers from prioritising content.

According to Michael Weinberg, vice president of US digital advocacy group Public Knowledge, an Internet Service Provider is now telling content providers that the only way its service can work is if an extra fee is paid. “The Internet Service Provider is injecting itself into the relationship between Netflix and its customers,” he observes.

Findings from network intelligence company Sandvine’s Global Internet Phenomena Report: 2H 2013 suggested that Netflix was the unchallenged leader for traffic, accounting for 31.6 per cent of downstream traffic during peak period. Although noting that Netflix’s share of traffic had decreased slightly since its 1H 2013 study, it should not be interpreted as a decline in the dominance of the service at the expense of Netflix’s competitors. “In fact, the bulk of data collection for this report occurred before Netflix made SuperHD content available to all subscribers, regardless of the service provider. Based on initial findings from customers, we expect Netflix share to return to or even surpass its previous heights,” advises Sandvine.

Comcast’s new deal with Netflix is said to be similar to the types of interconnection agreements it has with other larger Internet partners, and clears the way for Netflix to connect to the Comcast network at various regional interconnection points around the country. The WSJ pointed out that other Internet firms such as Facebook and Google has also begun to pay major broadband ISPs for more direct connections.

The FCC has recently reiterated its intention to craft regulations to enshrine net neutrality. In any event, although a court has vacated the anti-blocking and unreasonable discrimination provisions for wireline broadband  from the FCC’s Open Internet Order, Comcast must continue to adhere to them through 2018, as part of the conditions of its acquisition of NBCUniversal. New FCC Chairman Tom Wheeler announced last week that he will seek to restore the Commission’s network neutrality rules.

Posted by on Feb 24 2014. Filed under Articles, Broadband, Content, IPTV, ISP, OTT, Work flow.

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