Comcast and Netflix sign deal

Comcast is the biggest cable and broadband company and – if its purchase of Time Warner is approved – about to get bigger. And Netflix is the biggest... well, it’s Netflix, with 44 million members in 41 countries, and providing nearly a third of all traffic on the Internet. Now Netflix has agreed to pay Comcast to transport its traffic to its customers.

According to a Comcast corporate news release, “Working collaboratively over many months, the companies have established a more direct connection between Netflix and Comcast, similar to other networks, that’s already delivering an even better user experience to consumers, while also allowing for future growth in Netflix traffic.”

According to The Hill, “Through the deal, Netflix will pay Comcast an undisclosed amount to connect directly to its servers, which should improve video streaming quality for Netflix subscribers who access the site through a Comcast connection, according to the report.”

In essence, this is what is called in Internet parlance a “paid peering” deal. Netflix is paying Comcast to transport its traffic to customers, and Comcast ensures speedy delivery. There are many paid peering arrangements between Internet backbone companies; what makes this deal different is that Netflix is a content provider, not a network.

Prior to this deal, Netflix contracted with backbone provider Cogent to bridge between its servers and the ISPs of its subscribers. But with this deal, Netflix eliminates the middleman.

Internet users had complained of slow Netflix service prior to this deal. Some suspect Comcast may have deliberately slowed Netflix traffic.

It's clear  that this is just the first of this kind of deal – where companies like Netflix, who account for high volumes of Internet traffic – pay more for transport. Expect to see Netflix and others strike similar arrangements with AT&T and Verizon.

As to its effect on subscribers, well, that remains to be seen.

Comcast and Netflix Team Up to Provide Customers With Excellent User Experience (Comcast news release, Feb. 23, 2014)

Netflix, Comcast reach streaming deal (The Hill, Feb. 24, 2014)

Comcast and Netflix Reach Deal on Service (NY Times, Feb. 23, 2014)