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Cable Technology Feature Article

February 24, 2014

Netflix & Comcast Talk Traffic, Reach Agreement on Streaming Speeds

By Steve Anderson, Contributing TMCnet Writer

The recent net neutrality arguments have left a lot of people wondering just what would be next, and usually, a fearful eye was cast in the direction of streaming video providers like Netflix. The idea that Internet service providers (ISPs) would be interested in continuing to allow Netflix and its all-you-can-stream business model untrammeled access seemed doomed to failure with the prop of net neutrality pulled away. But a new agreement between Comcast (News - Alert) and Netflix may have at least settled the question, and given viewers a bit of hope for the future of Comcast.

Over the last couple of months, several Comcast users have noticed a slowdown in Netflix streaming speeds, in some cases dropping down nearly a third to almost 30 percent. But under the terms of the new arrangement, Netflix will pay Comcast for outright access to the broadband network. It's being called a “paid peering” deal, and keeps Netflix from going through intermediary connection systems as it did in the past, all for a sum of money which was not formally announced.

Comcast and Netflix's issues go back several years—well before this most recent net neutrality regulation—and represents something of a compromise for the two firms. Netflix wanted access to Comcast's network for free, but Comcast asserted that Netflix means a lot of traffic, and as such, Comcast should be compensated accordingly. The argument went on for some time, and Netflix followed it all up with a release last month that reportedly showed declines in streaming speed on Comcast until this deal was established. Some have suggested that this kind of deal-making is likely to continue with AT&T and Verizon (News - Alert), and similar networks.

Both Netflix and Comcast say that preferential treatment on the network is not a condition of the deal, but there have been reports of concerns from those watching the ongoing net neutrality arguments, suggesting that this may be the start of a disturbing new trend in which websites like Netflix pay to get superior access. Indeed, with reports that net neutrality principles may well be back in force fairly soon, it's worth wondering why Netflix even went in on this deal in the first place.

The worst of it is, both sides have a point. Comcast, and networks like it, do shoulder the brunt of cost when it comes to traffic. Upgrading isn't cheap, and the user's appetite for more bandwidth will only increase as more things become available to do with that bandwidth. Between streaming video, online gaming, the rise in Web-based real time communications (WebRTC) tools and several others, people will want more bandwidth, not less, and it will fall on the ISP to provide. But Netflix has a point too; what point is there in getting the higher-bandwidth options without something to do with all this bandwidth? Netflix is a draw not only to the broadband ISP in general, but also to the broadband ISP's more expensive plans. If an ISP fails to offer sufficient bandwidth to enjoy Netflix, it's an opportunity for competition—particularly like that of Google Fiber—to step in and offer what the other won't. The limited competition in many areas, however, does hamper this argument somewhat.

Still, it's not a simple issue to overcome, and will likely require a lot more examination before it's all said and done. The people want more, and some are willing to provide, while some face a stark reality of higher bills for all this provision. Only time will tell, meanwhile, just how it all ends.

Edited by Cassandra Tucker

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