Netflix will pay Verizon for better interconnection and streaming service


Netflix confirmed on Monday that it sealed an agreement with Verizon Communications to provide video-streaming service with faster direct connection of its television movies and shows to broadband customers.

"We have reached an interconnect arrangement with Verizon that we hope will improve performance for our joint customers over the coming months," Joris Evers, Netflix spokesman, says in a statement.

"We reached this agreement to deliver improved service for our combined customers," Verizon spokesman Bob Varettoni also says of the deal.

Though there's no further information as to the exact details of what they call as paid-peering deal, analysts presumed it is similar to the agreement earlier signed with Comcast in February that requires Netflix to pay additional fees for a faster Internet access to their shows. The deal though doesn't give a preferential treatment to Netflix, but rather allow the latter to bypass Internet congestion.

The Comcast deal is said to have improved the performance of the video-streaming service by 65 percent between January and March 2014, as opposed to the data released in February showing the decline of 27 percent on the speed performance of the streaming service since October 2013.

Gathered reports say Netflix CEO Reed Hastings half-heartedly agreed to pay for the additional fees for the deals so that the company's subscribers would receive better service from them. The latest moves of Netflix were contrary to its earlier stand that the access should be free.

The deal, however, comes days after the proposed Open Internet plan of the Federal Communications Commission came out. The plan stimulated various reactions and criticisms from several consumer groups and individuals who are worried that the new plan may put Net Neutrality in danger. 

Apparently, other talks are in place as AT&T also admitted of a similar deal with Netflix. Although the latter wouldn't comment straightforwardly on the said negotiations, it also acknowledged that it has been in touch with major Internet service providers on the said quicker direct connection for subscribers.

Earlier, Netflix was at odds for months with broadband operators as to who should pay the big volumes of traffic the former sends to the latters' networks. Research says the streaming service accounts for as far as a third of the peak Internet traffic in North America based on data from Sandvine Corp, a network gear manufacturer. Also, thousands of other networks directly connect to broadband providers to efficiently share traffic, and some of them paid for such access.

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