Comcast and Netflix reach interconnection agreement

Comcast and Netflix reach interconnection agreement

Summary: Netflix will pay Comcast to access their broadband networks directly. The agreement spans multiple years and should improve Netflix performance for Comcast subscribers.

TOPICS: Broadband

Comcast and Netflix announced an agreement today under which Netflix will gain direct access to Comcast's broadband network. A Wall Street Journal report says that Netflix will be paying Comcast an undisclosed amount in the agreement.

The agreement was first reported by GigaOm. [Correction: An earlier version of this story said that the WSJ story was the first.]

The companies have released a statement:

    Comcast Corporation and Netflix, Inc. today announced a mutually beneficial interconnection agreement that will provide Comcast's U.S. broadband customers with a high-quality Netflix video experience for years to come. 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. Netflix receives no preferential network treatment under the multi-year agreement, terms of which are not being disclosed.

As the statement says, the deal spans multiple years which, gives Netflix some security that their growing traffic needs will be met, while (per the WSJ story) Comcast gets some compensation for their costs in servicing Netflix, perhaps the biggest source of traffic on the Internet. The official statement neither confirms nor denies that Netflix is paying Comcast as part of the agreement.

As Netflix's own data shows (see graph below), performance on Comcast and many other ISPs has been declining in recent months. The WSJ story says specifically that Netflix Chief Executive Reed Hastings decided to make the deal because of the performance of their service for Comcast subscribers.
Netflix performance on Comcast, November 2013 - February 2014

Netflix is making no statements about relationships with other ISPs, but this agreement would seem to make other agreements between Netflix and other major ISPs more likely. Last week reports indicated friction between Netflix and Verizon over the same issues.

The agreement between Comcast and Netflix is a paid peering agreement. Netflix has its own content delivery network (CDN), Open Connect, for such arrangements, but the agreement does not say that Open Connect is the mechanism by which the companies will interconnect.

Topic: Broadband

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  • Ya know . . .

    "Netflix receives no preferential network treatment under the multi-year agreement"

    Ya know . . .

    . . . when I pay for access to the internet, I expect equal access to everything. Agreement or no agreement, I don't expect any service to be throttled just because of some fight "behind the curtain."

    If I actually had a choice of ISPs, and if one boasted equal access to all services, I'd go with that ISP, even if it cost a bit extra.

    . . . and that's why I'm all for net neutrality. Because I want equal access to all services.
    • Be careful what you wish for

      equal access to everything might mean crappy access to most places. If you mean full-speed access to everything then you're just living in a dream world. It's not possible. Bandwidth is a scarce resources, and the most efficient way to allocate scarce resources is by market pricing.
      • Algorithms are better than market pricing.

        "If you mean full-speed access to everything then you're just living in a dream world."

        No, I'm not talking full-speed access to everything; you're right in that I'm unlikely to ever get that. But then again, nor do I need to - I don't need gigabit speeds for things like webpages that need that type of bandwidth. It is understandable that they do shape the bandwidth as needed.

        "and the most efficient way to allocate scarce resources is by market pricing."

        I disagree. Software algorithms that shape the traffic as needed are far superior to market pricing.
      • Bonanza for retransmission logic

        Making excuses for invented scarcity is the better way to make money, even if it is the weaselly thing to do. Now ISPs get to argue just like cable companies that their business depends on retransmission fees and they would be at an unfair loss without them.
    • Be careful

      Net neutrality is a convenient way for government to insert itself and screw everyone. Regulations often lead to taxes that are billed to you on a monthly basis. When Comcast started this nonsense I moved ISPs to let them know that I'm not putting up with their BS.
  • Prices, anyone ?

    All costs by Netflix are paid for by us, in the short future we will get raised subscription rates, I had to use VPN as per just to fix the speed issues, at least I got all global channels that count, if Netflix raises prices i am out
    • Rumors are subscription increases in April

      Supposedly they are going to announce the new rate of $9.99 along with a new premium $13.99 streaming service that has more HD and current content than the 1950's trash that makes up half their existing catalog. Some analysts have said that Netflix might gradually increase their service all the way up to $19.99 which would be closer to HBO-style pricing.

      No matter what, the customer takes it in the neck with this deal. Prices go up, but don't look for any improvement in Comcast service or speed, nor will Netflix be exempt from the data cap. The Netflix payoff money flows right into the Roberts family's pockets, not into any kind of meaningful fix for the stretched-thin infrastructure.
      terry flores
    • Isn't it called Double Dipping?

      Comcast getting paid twice for the same thing, Increase prices for everyone.
      I'm not a Comcast customer but if I was am I not already paying them for my Internet connection and a block of data. What should it matter to Comcast what I put through the pipe, I'm paying for, even if I go over my data limit I then get charged overages. So they whine and get Netflix to pay them a second time for the very same blocks of Data they then raise my Netflix rate to cover it. So I end up paying Comcast twice for the same Data blocks. But it gets worse. Once the other Service Providers find out they will demand the same deal, in no time at all the rates go up for everyone. Once the precedent is set where does it end, next Hulu, Boxe, Cinimax, Youtub, google, Crackle, on and on. The Postal service has been threatening a service charge on every email, what next?
  • It's hard to feel sympathy for the ISPs though...

    they have had YEARS to upgrade their fiber/cable/copper network infrastructure to handle the increased demand. They were even given large incentives to do so (monetary) and yet here the US sits in something like 16th place among so called "developed" nations in broadband access/speeds.
    • I mentioned before, don't blame Comcast

      it's not like they're greedy, or anything. Maybe they don't have the money.

      Or maybe they're just too busy owning NBC, Universal Studious, Universal Studio Park, The Wells Fargo center, The Philadelphia Flyers, Comcast-Spectacor.....

    • Broadband isn't just slow in the U.S.

      It's also expensive (Google fiber, excepted).
      Rabid Howler Monkey
  • What Mbps?

    They should have shown cumulative peak throughput for all content that Netflix dumps into the Internet. I bet it has increased tenfold in recent times to the extent that it started to clog the Internet tubes. People are "binge watching Netflix junk" (google it). I know this may sound unpopular, but do those, who don't watch it, have to pay for it?
  • Will Comcast be rebating customers who were paying to connect

    Well, I would have thought Comcast customers were already paying to connect to the internet. It seems that to be "fair" Comcast should give a rebate to their customers that use Netflix as Netflix is now picking up the tab as well.
  • Don't like the precedent

    Connect directly to our network and pay us for the privilege or we throttle you.
    John L. Ries
  • It's not like they were suffering a bandwidth shortage

    ... if all it took was money to change hands. I call that coercion, extortion, and unethical business practice.
  • Before we completely forget

    TV used to be...wait for it...FREE!
  • FEAR and Superstition!!

    Because the net neutrality nuts will not let the isp's deliver intelligent networks, the only other solution is proxy or peering. Since there is no qos in the network to handle voice and video, you have to move servers closer and throw lots of bandwidth at it. All at the consumers expense. Ask any network administrator about how they impliment voice and video over their private networks.. The laws of physics dont change. So... Lets keep the internet at the 1964 level because of ignorance and total stupidity. Slow internets mean that google gets to put more ads out there and collect more info on you. Bandwidth will always be a premium and and intelligent network will allow voice and video to travel in real time and allow newer services. CATV companies would be out of business in a flash. Come on people.. go talk to a network administrator. Ask how they are doing the private networks and making it work. Then ask yourself why did google start all the fear and misinformation.