ATT, Verizon also talking Netflix ‘direct connection’
February 25, 2014
AT&T is also in interconnection talks with Netflix.
“We’re in discussions with Netflix to establish a more direct connection between our networks, similar to agreements we have with others, so that AT&T broadband customers who use Netflix can enjoy an even better video experience,” AT&T said in a statement following news of the Netflix – Comcast peering deal.
Verizon Communications CEO Lowell McAdam also told CNBC that it has been holding similar talks with Netflix for over a year, adding that “I would expect that we would” sign a deal with Netflix.
With Netflix counting for up to a third of traffic, networks are aware open connection has costs and compromises for other customers. A deal with Netflix subsidises the cost and means a better service for Netflix subscribers.
Comcast and Netflix did not disclose the financial terms of their deal, but analysts have already guessed that the cost to Netflix is relatively marginal.
According to Variety, Wedbesh Securities estimates that Netflix is paying Comcast between $25 million and $50 million, versus the $400 million Comcast had been seeking, but predicted that payments to ISPs will grow in the coming years.
Despite some reactions to the contrary, most analysts acknowledge that the Comcast-Netflix deal, and perhaps the similar deals that are expected, have nothing to do with network neutrality, but are simple commercial agreements that have long been in place.