With Net Neutrality dead, Netflix inks deal with Comcast

When Net Neutrality was recently shot down in the United States, many feared that Internet Service Providers (ISPs) would create toll roads that required companies to pay to reach their end-users. That could in turn force the prices of services up and stifle competition such that startup companies in the vein of Spotify and Last.FM could never again be viable.

It turns out that those fears may already be coming true: The New York Times is reporting that Netflix signed a deal with Comcast to provide the movie company with, "faster and more reliable access to Comcast’s subscribers." Details of the arrangement were not immediately released, but Netflix is apparently paying Comcast millions of dollars a year for this access.

For their part, Comcast is claiming that this has nothing to do with Net Neutrality. Indeed, the press release stated that, "Netflix receives no preferential network treatment under the multiyear agreement." the deal may simply allow Netflix to house servers in Comcast's datacenters in order to stream content faster. However Netflix has been reporting that content delivery speeds have been reduced by more than 25 percent recently and, although the ISP claims that they have not been responsible for the throttling, the timing of this new arrangement is peculiar if nothing else.

We'll have to wait and see if this is the first of many deals that ISPs make with content providers, whether this new revenue stream will reduce Internet costs for consumers, or whether this will increase consumer costs and stifle innovation.

Source: New York Times | Net Neutrality image via Shutterstock

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42 Comments

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Net neutrality is dead...great news! Why should resource hogs reasonably expect the light users to pay for their excess usage? It all comes down to the basic axiom: "You get what you pay for." No more, no less.

I love how a certain channel raises prices, so the cable company will put banners up on the channel blasting the channel for their outrageous price hikes and how everyone should call the channel and demand they keep the price down.

And then this.

I understand why Netflix finally had to make this agreement but this just created a very slippery slope for future content providers.

"The New York Times is reporting that Netflix signed a deal with Comcast to provide the movie company with, "faster and more reliable access to Comcast's subscribers."

So Netflix has to pay for us to get something that should be standard? Price hikes coming soon to a neighborhood near you.

JHBrown said,
"The New York Times is reporting that Netflix signed a deal with Comcast to provide the movie company with, "faster and more reliable access to Comcast's subscribers."

So Netflix has to pay for us to get something that should be standard? Price hikes coming soon to a neighborhood near you.


go read the blog linked above about how inaccurate this story is.

I don't even use netflix but as a future comcast subscriber (assumed due to Time Warner Cable merger probably going through and lack of another isp in my area with suitable speeds) I really dislike this move. From what they say it sounds legitimate but I just don't really trust them I guess. This sounds like behind-the-scenes pressuring for an agreement to prevent throttling against companies who don't pay the destination isp some ridiculous fee.

Traffic is traffic and should not be QoS'd at the ISP level except to block certain things such as child pornography, DDoS attempts, etc.

Edited by Squirrelington, Feb 24 2014, 7:28am :

Squirrelington said,
I don't even use netflix but as a future comcast subscriber (assumed due to Time Warner Cable merger probably going through and lack of another isp in my area with suitable speeds) I really dislike this move. From what they say it sounds legitimate but I just don't really trust them I guess. This sounds like behind-the-scenes pressuring for an agreement to prevent throttling against companies who don't pay the destination isp some ridiculous fee.

Traffic is traffic and should not be QoS'd at the ISP level except to block certain things such as child pornography, DDoS attempts, etc.

Current Comcast Subscriber. Blast internet. I just put in a new modem and router last week so I was doing some metering this weekend. I can maintain a 50Mb of constant downstream for at least 30 minutes (I got tired of downloading the same files from my FTP over and over). If they were throttling Netflix I didn't see it. My router was running a solid 2Mb down from Netflix servers for about 6 hours on Sunday. Everyone was home and several times I had to kick one of the kids off Netflix so I could watch a show.

Now, someone tell me why Funimation video stream sucks so much.

wingliston said,
About to switch to U-verse. Anyone had any experience with this ISP?

It's AT&T, so they're crappy in my opinion...

Had it for 3 months. If you are a heavy user, look elsewhere. I am currently using Time Warner at 100/5. No problems at all. Would love a better upload.

I've been using U-Verse for almost 5 years now and its been great. The speeds are lower than something like Comcast but the pipe is yours - no slowdowns at any point in the day. Honestly, I've never had to deal with AT&T after installation - no downtime, no data cap issues, no written warnings, etc.

I'm hoping for faster packages at some point.

What in the world does Peering and setting up CDN's have to do with net neutrality? Netflix has partnered with a lot of large ISP's to peer closer to their systems to get better routes... this is not "net neutrality" this is peering issues....

The issue is Comcast throttles the connection done in order to force illegal deals like this. CDN's they refused unless Comcast pay them.

Why don't I call FedEx and UPS to then charge you when I ship something to you since you like to pay both ways. Wouldn't you be pissed? It is the same thing.

Fact is the tax payers paid for the fiber. They put the money to the CEO and shareholders and now whine they can't meet demand. Meanwhile 95% of fiber is dark if statistics are correct as this would lower demand for making bandwidth a scarcity.

In SK you can get a 100 meg connection for like $20 a month. You are being rapped big time by these guys

sinetheo said,
The issue is Comcast throttles the connection

All connections in the world are throttled. They throttle you based on the speed you paid for. Pay for a 5 meg connection? Then you are throttled to a 5 meg connection. What the Netflix deal does is that it makes a NETFLIX feed at its maximum to NETFLIX packets to a customer who obviously has a netflix subscription. This ONLY affects individual accounts and are NOT affected outside the subscribers account.

You get only 5 megs a second for bandwidth meter test sites and of course Comcasts video on demand. 50k for a competitor such as Netflix. It is illegal.

Basically they paid off ... Campaign contributed an FCC chairman who works for the ISPs as a freaking lobbiest to reclassify as an information services company. Not an ISP.

sinetheo said,
You get only 5 megs a second for bandwidth meter test sites and of course Comcasts video on demand. 50k for a competitor such as Netflix. It is illegal.

So... IF what you say is true, and you were only getting 5 meg burst anyways, you are not losing anything. So whats the problem?

rippleman said,
All connections in the world are throttled

Mine isn't throttled by my ISP, but what my copper line can physically handle to the exchange. When they upgrade the line (which they will eventually) I'll get a speed increase without having to pay anything extra.

mrbester said,

Mine isn't throttled by my ISP, but what my copper line can physically handle to the exchange. When they upgrade the line (which they will eventually) I'll get a speed increase without having to pay anything extra.
All ISPs throttle you to the speed you pay for.

sinetheo said,
You get only 5 megs a second for bandwidth meter test sites and of course Comcasts video on demand. 50k for a competitor such as Netflix. It is illegal.

Basically they paid off ... Campaign contributed an FCC chairman who works for the ISPs as a freaking lobbiest to reclassify as an information services company. Not an ISP.

you obviously have no idea what Comcast has set up... Comcast is not throttleing anything... this has to do with peering issues, and routing... ciomcast is NOT the only ISP that has this problem. and for them to ask money to set up a peering point on their routes is not a neutrality issue... that does cost them money.. Netflix has set up peering points for a few ISP's and you see that with their stats... this is NOT throttleing... this is bad routing in comcasts case.. if they set up a peering port on their IBONE network speeds would drastically improve because you are now all internal routing inside their private backbone... once again nothing being throttled... Netflix is just buying a port on their network and paying for bandwith on it...... the same exact thing anyone buying a network connection would be doing.... we have a 1Gbps peering connection with Comcast at work for our CND servers it costs us $20k a month... and that's a single port... Netflix would be buying more then one peering port

and to house their servers at a Comcast location COSTS MONEY... go and buy 48U's of rack space and tell me how much that costs? you know Netflix isn't going to be using a single U or a few U's they are going to be using RACKS full of servers and caching drives....

I am not even sure how this can happen. This whole situation goes against the very basic agreements that Comcast made with the fcc/doj when they bought out NBCU.

Last I heard it was Netflix that was struggling to keep up with demand. This will certainly help, though Comcast should really be offering that for free because it'll ultimately save them money to have the data closer to their customers.

rc^4 said,
Last I heard it was Netflix that was struggling to keep up with demand. This will certainly help, though Comcast should really be offering that for free because it'll ultimately save them money to have the data closer to their customers.

but the data competes with their services.

rc^4 said,
Last I heard it was Netflix that was struggling to keep up with demand

Netflix should move to better suppliers, perhaps to a google datacentre. Lets see Comcast throttle google!

If they did, maybe google could "blacklist" comcast

so let me see...

a Comcast subscriber pays Comcast for (say) a 100Mb/s connection, but if they connect to netflix, Comcast are only going to supply them with a bandwidth limited connection, unless Netflix pay Comcast AGAIN to supply the bandwidth their subscriber is already paying for???

This is America isn't it? Comcast's subscribers should start a class action suit against Comcast for snot supplying the service they are paying for!

It's great isn't it. Netflix pays to upload the data, the customer pays to download the data, then the ISP charges Netflix extra to ensure they don't artificially limit the data.

Exactly my thoughts...we pay for our speeds as advertised but then they move them around based on the source/endpoint. Sounds like bait and switch to me...oh yes we made your speed test look decent, but we're actually just hiding the fact that you're not getting those speeds on some sites/content.

I noticed this at my house the other day, 100/20 Mbps (d/u) and I couldn't stream more than 240 or something along those lines (yet, I could stream an 40 min 1080p HD movie from youtube in no time).

Isn't it wonderful when the financial interests of the wealthy elites always take precedence over the interests of the people and the common good?

GumbyDammit said,
Isn't it wonderful when the financial interests of the wealthy elites always take precedence over the interests of the people and the common good?

No need to play the class envy card. You are simplifying things quite a bit. These "wealthy elites" as you call them answer to stock holders (like you, probably!), who *demand* growth. Stockholders only make money on growth. This is just another revenue stream, but it benefits more people than your demonized "elite."

GumbyDammit said,
Isn't it wonderful when the financial interests of the wealthy elites always take precedence over the interests of the people and the common good?

Spoken like a true Communist.