Netflix to pay Comcast for faster speeds

“Netflix has agreed to pay one of the largest broadband providers in the United States Comcast Corp for faster speeds, throwing open the possibility that more content companies will have to shell out for better service,” Jennifer Saba reports for Reuters. “Comcast and Netflix made the joint announcement on Sunday, marking the first time that Netflix is paying for faster speeds in the U.S. after customers complained about slow service. Terms of the deal were not disclosed.”

“The issue is being closely watched as millions of people view movies and TV shows through streaming services offered by such companies like Netflix and Amazon,” Saba reports. “The companies said in a statement that they have been ‘working collaboratively over many months’ to strike a multi-year agreement. Netflix will not receive preferential network treatment, the companies said… As part of the deal, Netflix will deliver its movies and TV programs to Comcast’s broadband network directly as opposed through third party providers, giving viewers faster streaming speeds for watching movies and TV programs.”

“The arrangement comes as federal regulators are wrestling with an issue known as ‘Net neutrality’ concerning broadband providers and whether they can slow down traffic to particular websites, potentially forcing content companies to pay for faster Web service,” Saba reports. “The Federal Communications Commission said last week it plans to rewrite the rules after a U.S. court struck down the commission’s previous version.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Jaribbs” for the heads up.]

32 Comments

    1. Net neutrality or not, the real question I have is whether Netflix will have to raise their rates as a result of this while Comcast’s content sections don’t face this extra expense. Whether it’s legitimate or not, it seems like unfair competition to me.

      1. since netflix is hardly making money, most likely yes

        even then, apple, vudu, hbo and almost every other company who sell content on the internet pay a CDN to host their content inside the ISP’s network. the CDN company pays the ISP for this and the data they send. this is the way the internet has been done for 20 some years. netflix tried to get a free ride

        apple pays akamai. this is why my itunes rentals play in HD on my apple TV

    2. This absolutely *IS* a net neutrality issue.

      Over the last few months a whole horde of people across the U.S. who use Netflix and subscribe to Comcast have complained that their Netflix distributions have slowed to a crawl — some so much so that often their Netflix streams have been virtually unwatchable.

      At the same time, according to the article, Netflix has supposedly been negotiating with Comcast, publicly stated as being a peering/CDN deal.

      Don’t believe it for a second.

      You can bet during the “negotiations” Comcast stated, effectively: The FCC’s net neutrality rules are dead. We can slow any Netflix stream as much as we want with absolute impunity. You’re seeing that now. Your customers are seeing that now. You’re going to pay us one way or the other to make sure we don’t slow your data. Do a deal with us. Pay us what we want. OR ELSE. We’ll publicly call it a peering/CDN deal and throw in some of that just for appearances. BUT YOU WILL PAY US OR SUFFER THE CONSEQUENCES. YOU HAVE NO RECOURSE. PERIOD.

      Avoiding this Internet protection racket is one of the *primary* purposes of net neutrality.

      Try to put it into any kind of positive/neutral light you want, but it’s really just a protection racket.

      1. peering agreements between network providers go back decades. CDN’s have been around for almost 20 years. netflix wanted the ISP’s to install their CDN appliances for free with no cost, unlike every other CDN which has to pay ISP’s

        the whole slowdown started when netflix increased the amount of data they send last year with super hd. the ISP’s told cogent to pay for the new router connections. cogent handles part of netflix’s traffic. cogent refused.

        the whole time itunes, vudu and other services worked perfectly because they pay to host content on a CDN. this has always been a netflix issue not playing by rules that go back to the dawn of the internet

        1. So if it is a peering/CDN deal like you try to paint it, why is Verizon’s CEO stating that he expects to be able to get a similar deal and payments from Netflix? If Comcast is providing Netflix’s primary CDN why would Verizon demand the same thing? Still sounds like extortion.

          The issue was absolutely NOT with just the “super HD” implementations. The timing was just convenient for Comcast to point to that as the reason.

          Besides, your argument that “itunes [sic], vudu [sic] and other services worked perfectly” is irrelevant. In these kinds of things you only go after one organization at a time. You don’t take everyone on at once. You get one to fold, then the next, then the next.

          And you know that Comcast gave a “better deal” than they were getting from Cogent HOW? Care to divulge the details of the two deals — if you even know them?

          1. comcast is only peering with netflix and as was reported they gave better pricing to netflix than cogent. it was with super HD. since netflix doesn’t have any network they were paying cogent, an internet backbone provider to carry their traffic. cogent peers with the ISP’s.

            after super HD came out the amount of traffic from cogent sky rocketed. it either doubled or quadrupled, forgot. this overloaded the connections from cogent to the ISP’s they peer with.

            the theory behind a peering contract is each side sends equal amounts of traffic so the payments even out. or the whole thing is free. if one sides sends more traffic then they pay for the upgrades or pay for the traffic. cogent has been around a long time and knew what they were doing when they signed netflix to carry their traffic. level 3 did the same a few years ago

            now comcast will peer with netflix, meaning they will have a direct connection between their networks instead of going through cogent or level 3

            apple and others pay CDN’s to host their data inside the ISP’s networks. comcast and verizon included. Netflix has refused to pay CDN’s. they have their own CDN but require ISP’s to accept it for free, unlike every other ISP/CDN deal.

            1. Dude you have made it painfully obvious whom you work for.

              Comcast should be split in to ISP and content sales, so as to prevent them from using their ISP division to extort other content providers, forcing them to rase their rates to the level of (the vastly overpriced) Comcast Xfinity content sales.

              Utilities (like the cable network) can’t be permitted to extort other more efficient / more competitive business simply to prop up their own fat cat bloated content sales division.

              Once they are separate we don’t need endless legislation and watchdogs like the FCC to police them (and really when has government meddling this ever come out better for the consumer?)

              Really I think they (comcast) are playing with fire, unless they are paying off a huge amount of senators (which may be the case) they are about to have a plague of locusts (in the form of senators using a very polar and visible issue trying to exploit the issue to further this careers) defend on them.

    1. what is there to acquire except a bunch of expiring contracts to rebroadcast content they pay for? if anyone is going to buy netflix, its going to be Hulu since they are owned by the big media companies

  1. This is Information Highway robbery!

    Comcast’s customers are already paying for high speed internet. Why should Netflix have to pay as well? What’s next, a payout from the government to ensure Comcast’s customers get good service.

    1. Netflix is paying for faster internet from Comcast, and it will be interesting to see if Comcast adds a fee for Netflix. It looks like those with the bucks will get faster Comcast service. Hate to see that. I have Comcast cable and I do not know why but I get much quicker Netflix access via AppleTV than I do through my Tivo Premier connected to Comcast. Of course both come thru the same pipe, but ATV is just a better experience.

      1. Actually no your first premise is incorrect
        Netflix is paying not to be throttled or delayed.
        In effect they are paying to be treated like the rest of the packets coming in to a end users modem.
        Huge difference. On is a business agreement for special services the other is practically extortion.

    2. With Obama “in charge,” virtually anything is possible.

      The government has no money. Any “payouts” are coming from American citizens’ (the makers) pockets. Remember that when/if you vote next time.

        1. whoever the poster (first. blah blah) is (changes his name as elections come and go) seems to never contribute to the topic or inform, but simply ticks off ‘talking points’. an informed poster, at least today, is alert 1234, not that I agree with his history or logic, but at least it’s laid out for thought. first, just doesn’t have much to say about the issue, and possible like my retired uncle, finds a way to vent his feelings with no logic required, and the family still wonders why my uncle never could find a wife ; > /

        2. And you, montex, must be paid by George Soros (who contributes far more money to the Left than the Kochs have ever contributed to the Right) to post irrational assertions on message boards.

  2. What, exactly, is Comcast paying for here? If they’re not getting preferential access, what are they paying for? If they’re doing the work of speeding up the service, by delivering a CDN, it sounds like, why would they pay Comcast?

    I’m confused here. One of the early reports I read on this subject said this would force other ISPs to make similar deals. But if Comcast is the one getting paid, wouldn’t it be Netflix’ competitors who would be forced into deals, not Comcast’s?

    I just don’t get this. I feel, as is sadly usual these days, that we’re not getting the whole story. I’m going to withhold judgement until I read more.

    ——RM

    1. netflix used to pay level 3 and cogent for transit of their data since they didn’t have a direct connection to comcast. L3 and cogent are huge internet backbones.
      now netflix is peering directly with comcast, meaning they will send their data destined for comcast customers directly to comcast. netflix and comcast now have direct connections between each other’s routers in a california data center. and since the internet is based on sender pays, they will pay the costs of that

      these scary deals have been around since the mid 80’s. the sender of the data pays the receiver to take it. in theory both send the same amount of data and it evens out. when someone sends more data than they receive, they pay the costs to the receiver to upgrade their connections to receive the data.

  3. If Netflix can pay for greater bandwidth, that means all Comcast subscribers are already being throttled, net neutrality or not. I bet Comcast could flip a switch tomorrow and my 2Mbps download would “magically” turn into 20Mbs, but they are holding back to extort, er “charge” more money. Guess those shirts with the nipple flaps weren’t just a joke on South Park.

  4. Next COMCAST will turn around and offer retail customer special higher rates for a guaranteed level of service and charge our transactions with NETFLIX at both ends.

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