Netflix to pay Comcast for faster speeds

The Netflix logo is is shown on an ipad in Encinitas, Calif. on April 19,2013. Credit: Reuters
The Netflix logo is is shown on an ipad in Encinitas, Calif. on April 19,2013. Credit: Reuters

Netflix has agreed to pay one of the largest broadband providers in the United States Comcast Corp. for faster speeds, throwing open the possibility that more content companies will have to shell out for better service.

Comcast and Netflix made the joint announcement on Sunday, marking the first time that Netflix is paying for faster speeds in the U.S. after customers complained about slow service. Terms of the deal were not disclosed.

The arrangement comes as federal regulators are wrestling with an issue known as “Net neutrality” concerning broadband providers and whether they can slow down traffic to particular websites, potentially forcing content companies to pay for faster Web service.

The Federal Communications Commission said last week it plans to rewrite the rules after a U.S. court struck down the commission’s previous version.

The issue is being closely watched as millions of people view movies and TV shows through streaming services offered by such companies like Netflix and Amazon.

Netflix, which got its start as a DVD-by-mail service, has 44 million subscribers worldwide and 34 million in the U.S. alone. About 7 million subscribers pay for mail delivery services.

The companies said in a statement that they have been “working collaboratively over many months” to strike a multi-year agreement. Netflix will not receive preferential network treatment, the companies said.

As part of the deal, Netflix will deliver its movies and TV programs to Comcast’s broadband network directly as opposed through third party providers, giving viewers faster streaming speeds for watching movies and TV programs.

It also could force Netflix to strike similar arrangements, known in the industry as interconnect agreements, with other major broadband providers like Verizon and AT&T.

With more than 44 million subscribers throughout the world, Netflix has been making an effort to connect directly with broadband Internet providers. It has struck similar deals with Cablevision and Cox, though Netflix did not pay for these connections.

The arrangement with Netflix comes on the heels of Comcast’s agreement to buy Time Warner Cable for $45 billion, a deal that will draw the scrutiny of U.S. antitrust enforcers.

The combined company would have a near 30 percent share of the U.S. pay television market, as well as be the major provider of broadband Internet access.

 



News
Entertainment
Sports
Lifestyle
Money

Investing: Buying low, selling high

Learn how rebalancing can help you be successful in investing.

National

Is #JusticeForAvaLynn a case of bullying?

On Saturday, the hashtag #JusticeForAvaLynn became one of the trending topics on Twitter. Users circulated the above photo of 5-year-old AvaLynn, posted by her mother…

International

Terrorism could spread to US and Europe in…

Saudi Arabia's King Abdullah said terrorism would soon spread to Europe and the United States unless it is quickly dealt with in the Middle East,…

National

Ex-Bitcoin official to plead guilty to Silk Road…

Bitcoin entrepreneur Charlie Shrem has reached a plea deal to resolve U.S. charges that he engaged in a scheme to sell over $1 million of…

The Word

The Word: Jennifer Lawrence among victims of massive…

It's been a while since there was a celebrity nude photo leak, so some industrious and not-at-all-creepy hackers got together to unleash one doozy of…

Gossip

Joan Rivers on life support: Report

TMZ reports that comedian Joan Rivers has been placed on life support, "completely reliant on machines to stay alive." Rivers has been hospitalized since she…

Movies

What's new on Netflix in September

September has a supernatural theme for Netflix. UFO "documentaries" and the survivalist reality series "Doomsday Preppers" are among the new series coming to the online…

Going Out

'Friends' coffeehouse Central Perk coming to NYC —…

"Friends" is coming back for a one-off special: "The One with the Free Coffee." Warner Bros. is bringing a pop-up replica of Central Perk, the…

NFL

3 things we learned in the Giants preseason…

The final score didn’t matter — a 16-13 win by the Giants — but it would’ve been nice to finally see Big Blue’s new-look offense get on track.

NFL

NFL Power Rankings: Seahawks, Broncos, Patriots, 49ers start…

NFL Power Rankings: Seahawks, Broncos, Patriots start at top

U.S. Soccer

5 facts about new England captain Wayne Rooney

Manchester United striker Wayne Rooney was named as the new England captain by coach Roy Hodgson on Thursday.

NFL

Jets vs. Eagles: 3 things to watch

A win on Thursday night at the Eagles would give the Jets a 3-1 record and just their second winning preseason under head coach Rex Ryan.

Wellbeing

This Week in Health: Lesbians, men most likely…

Lesbians, men most likely to achieve orgasm Location: U.S. Study subjects: 2,850 people Results: Whether you find it shocking or not, a new study reports that…

Wellbeing

VIDEO: Still not wearing sunscreen? You will after…

Sunscreen is possibly the most often repeated - and ignored - piece of skincare advice. But Thomas Leveritt took a different tactic. With a short…

Food

Twitter used to track down sources of food…

When Chicago health officials saw Twitter users complaining about local food poisoning episodes, they reached out on Twitter to those users and often ended up…

Style

Trend: White hot on the 2014 Emmy's red…

White was one of the big trends on the Emmy's red carpet.