Not So Neutral? Comcast and Netflix Strike Network Deal

What's This?

Comcast has struck a deal with Netflix to connect the companies' networks in an effort to improve data delivery speed. In this Dec. 3, 2009 file photo, a sign outside the Comcast Center is shown in Philadelphia.

Image: Matt Rourke/Associated Press

By Jason Abbruzzese2014-02-23 19:54:00 UTC

The net may no longer be neutral.

Netflix has agreed to pay Comcast for direct access to the Internet service provider's broadband network, according to The Wall Street Journal . The move is anticipated to improve the streaming service's recent lagging performance.

While a deal was officially announced on Sunday, the terms of the agreement were not made public. Spokespeople from both companies declined to confirm or deny the allegation that money had changed hands.

If true, the agreement is the first known example of a company paying an ISP to improve connection speed. Such agreements have been highly scrutinized and until recently, legally dubious under the Federal Communications Commission's net-neutrality rules.

Netflix is particularly reliant on ISPs for its streaming video service, and its recent success has resulted in the company generating almost one-third of all North America's Internet traffic.

Broadband providers have had trouble keeping up with this growth, and appeared unwilling to help Netflix without getting something in return. As a result, Netflix speeds on Comcast and Verizon have suffered.

Netflix had recently been pushing Open Connect, its own content-distribution network that links directly with broadband networks to help improve its streaming speeds.

Terms of the deal were not disclosed, but a person at Netflix familiar with the agreement told Mashable that the companies will be directly connecting networks.

"Netflix wants to scale Internet TV for the future, and this is a mutual agreement with the biggest cable TV and broadband provider in the US," the Netflix source said. "We realized we needed a compromise to find a path forward together. Both sides saw their customers affected and set to work on solutions to scale high bandwidth applications like Netflix for the future that outweighed any pain of compromise for both."

A Comcast representative said customers should see rapid improvement in Netflix performance over the coming weeks.

The companies emphasized in a statement that Netflix traffic will not receive special treatment.

"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," the companies wrote in a press release. "Netflix receives no preferential network treatment under the multi-year agreement, terms of which are not being disclosed."

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Topics: Business, comcast, Media, net neutrality, netflix