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Netflix to Pay Comcast for Faster Streaming

February 27, 2014

Netflix, which now accounts for over 30% of all broadband traffic, has been getting a lot of complaints about poor streaming performance in recent months.  Suspicion had been that the internet service providers might be throttling streaming media or prioritizing other traffic.   Netflix had even been chiding Comcast for poor performance to subscribers on the Netflix Performance Blog.  Netflix has now announced that is paying an undisclosed amount (in millions of dollars) to connect directly to Comcast to provide faster speeds to Comcast customers.  One internet cartoonist likened the deal to automakers limiting your car's speed unless the gas company paid them to unlock it.     Netflix is not paying Comcast to receive preferential treatment on their network which would violate the principles of Net Neutrality (The idea that governments and ISPs should treat data equally and not discriminate based on data type, usage or destination.)  There is worry that this kind of deal where a content provider pays for access is a step away from an 'Open Internet', that it will lead to consumer price increases, and have a chilling effect on new internet companies.  Seeing Comcast charge both customers and Netflix for people to watch movies, Verizon and AT&T are reportedly lining up for similiar deals.