Netflix signs deal with Comcast to keep streams lag-free

By on February 24, 2014, 8:00 AM
netflix, comcast, broadband, streaming, agreement

Netflix has come to an agreement with Comcast to ensure the streaming service receives the necessary bandwidth to provide a smooth and lag-free experience for the company’s broadband customers. The duo promised in a joint press release that the collaboration would provide a better user experience for years to come.

Specifically, Netflix will now be able to connect directly with Comcast’s network in multiple locations instead of having to route traffic through third-party content delivery companies. It is this extra step that many believe has led to a degradation of service.

As of the first of the year, Netflix played host to 33 million subscribers in the US. That may not sound like an insane amount of members but it certainly adds up: traffic from Netflix during peak times accounts for around a third of all Internet traffic.

It is the first deal that Netflix has inked with an Internet service provider but likely won’t be the last.

Terms of the deal were not disclosed although there’s no doubt that Netflix investors will be clamoring to know how it will affect the company’s bottom line. What’s more, it will be interesting to see how the costs are passed along to subscribers.

The streaming media company has been experimenting with a couple of different rate plans as of late. Back in December, Netflix announced a standard definition only plan for $6.99 as well as a family option that provides four simultaneous streams in either SD or HD for just $11.99 monthly.




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1 person liked this | MilwaukeeMike said:

traffic from Netflix during peak times accounts for around a third of all Internet traffic.

That's why this deal happened. Netflix is requiring a ton of bandwidth and Comcast is responsible for providing it. When internet connections slow down because of high traffic Comcast will get the blame, and they will have to pay for the upgrades and the maintenance on the networks Netflix is using so much of. I'd much rather Comcast go after Netflix for this cost rather than it's customers.

Terms of the deal were not disclosed although there's no doubt that Netflix investors will be clamoring to know how it will affect the company's bottom line. What's more, it will be interesting to see how the costs are passed along to subscribers.

We'll never know if any price change is because of this. Netflix would charge us more if they believe people will still pay for it. Remember when streaming was a free add-on to your DVD mail service? As they acquire more content and produce more of their own (House of Cards etc) they're going to charge more anyway. $8/month is a steal for what we get.

2 people like this | treeski treeski said:

That's why this deal happened. Netflix is requiring a ton of bandwidth and Comcast is responsible for providing it. When internet connections slow down because of high traffic Comcast will get the blame, and they will have to pay for the upgrades and the maintenance on the networks Netflix is using so much of. I'd much rather Comcast go after Netflix for this cost rather than it's customers.

Knowing Comcast, they will go after Netflix AND the customers.

1 person liked this | Skidmarksdeluxe Skidmarksdeluxe said:

Netflix played host to 33 million subscribers in the US.

That's almost more than the population of my country including the millions of illegal immigrants.

MilwaukeeMike said:

Knowing Comcast, they will go after Netflix AND the customers.

Check out this story on Yahoo calling this deal a win for customers. The long and short of it is that customers won't get any rate hikes from Netflix because the deal allows Netflix to bypass intermediaries in their network. Netflix was paying them to get it's content to the ISPs and now they won't have to anymore. Instead (it sounds like) they're going to be paying Comcast for a direct connection. That means better Netflix service for the customers and no price hikes. The ones who get the short end are these intermediaries... whoever they are.

According to the same story, Comcast won't be raising any rates for any reason because of the acquisition with TWC. Because of all the scrutiny with regulators they are being extra careful not to upset anyone.

1 person liked this | wastedkill said:

This is just creating a stream of ISP's trying to force customers and content providers out of cash!!!

Bandwidth is free for ISP's Or am I missing the fact that sending 100TB of data locally for free isnt the same to what ISP's do...

If Netflix keeps getting pulled in like this they are gonna be loosing soo much money thanks to greedy ISP's that are too greedy to either upgrade or understand bandwidth is free for them.

9Nails, TechSpot Paladin, said:

This is just creating a stream of ISP's trying to force customers and content providers out of cash!!!

Exactly! I don't like this deal one bit. On the one hand, yes, it's nice that Netflix will get some sort of priority or guaranteed service. But that's exactly where the good out of this ends. This sets the proceedings for other ISP's to throttle traffic and hold Netflix at ransom unless they pay for higher bandwidth assurance. And the customers lose on the deal.

ISP's carry a finite amount of traffic and they can stall upgrading to higher levels by making use of throttling technology instead of buying larger routers and interfaces to accommodate the growth. If Netflix is carrying 1/3 of the traffic it would be a fat and easy target to hit.

2 people like this | Amigosdefox said:

Bye net neutrality.

ghasmanjr ghasmanjr said:

Bye net neutrality.

It shall be missed. Just wait until XBLive and PSN work better with specific providers. There will be an uproar.

3 people like this | Brodo Laggins Brodo Laggins said:

Bye net neutrality.

Sniped_Ash said:

This sets a pretty gross precedent, but on the other hand, Netflix's bandwidth use is obscene and is only going to get worse...moreso if 4k streaming becomes a thing. I can't really fault Comcast for saying, "Whoa now..."

wastedkill said:

This sets a pretty gross precedent, but on the other hand, Netflix's bandwidth use is obscene and is only going to get worse...moreso if 4k streaming becomes a thing. I can't really fault Comcast for saying, "Whoa now..."

IKR its like the government going "Whoa now..." on our earnings and adding a 70% tax to pay on every cent we earn.

This is 2014 not 1960 where bandwidth is anything to be concerned about we can easily do unlimited bandwidth I mean bandwidth is nothing but a way to increase costs to consumers whilst the ISP is like "Damn these guys are paying for stuff that doesn't exist they dont even know bandwidth is a myth I mean we dont buy it from the makers of the internet. We are making a killing from these tards"

1 person liked this | Guest said:

what MilwaukeeMike and a few otheres fail to realize; comcast got a huge sum of money (as did several other ISP) from tax payers, curtsey of our federal government, to build the INFORMATION SUPERHIGHWAY so I could sit in east bubble!@#$ new mexico and get the same high speed internet as anyone in San Fransisco (not using google). The ISP took the money and did increase speeds in several major cities and then turned around and said to the government "we won't make anywhere as much money as we planned originally by building the superhighway so we will just pocket the rest (several billion) and make several large sum contributions to your re-election campaigns" and of course the government said "that sounds fair to us". So now we pay 4x the price of internet speed in western civ countries like France yet only get 1/4 of their speed.

1 person liked this | Guest said:

We'll never know if any price change is because of this.

This will just be passed along as another "yearly price increase due to the higher demand of customer bandwidth" from Comcast. The people that really lose are the ones that don't use Netflix or any other streaming service that still have to pay the higher rates. I mean, that's like YOUR yearly taxes and expenses going just up to pay for everyone else's healthcare! Oh wait.....

Guest said:

Bye net neutrality.

It shall be missed. Just wait until XBLive and PSN work better with specific providers. There will be an uproar.

If anyone is to blame for castrating Net Neutrality, it is those lousy Republicans. Damn them to hell!

JC713 JC713 said:

Never saw this coming. Bad move Netflix.

MilwaukeeMike said:

Never saw this coming. Bad move Netflix.

Bye net neutrality.

It shall be missed. Just wait until XBLive and PSN work better with specific providers. There will be an uproar.

You guys know why this started? Because House of Cards caused a ton of slowdowns and people weren't getting to watch the Netflix they paid for because the connection they also paid for was too slow because of everyone else watching House of Cards. This deal is supposed to fix that, and everyone is freaking out?!

Look at it from both sides...

[link]

tipstir tipstir, TS Ambassador, said:

Next they're going to raise the rates, but they have 44 million so each pays $7.99 so they have enough to cover the cost to COMCAST, But since the USG not doing anything COMCAST can still play the drop the throttle game. It's shame if they Netflix raises the rates they're going to loose customers. I am not paying $16, $32 or even $64 for Netflix. a month crazy.

Guest said:

So does this mean that any time any website or online service gains popularity the internet service providers can then extort money out of them? Which in essence puts those services at a competitive disadvantage due to increased costs. Is Facebook going to be charged for the traffic that goes to it's data centers? I'm sure Comcast / Verizon / Time Warner etc. are all eyeballing Google's pile of cash for access to youtube.

This is the single biggest civil rights issue of our times but no one even knows what's happening. If allowed ISP's will essentially make toll roads out of the entire internet, diminishing the "free-ness" and democracy of the internet as a whole. Unfortunately because regular consumers don't see what's happening there's very little that will stop these forces.

Tanstar said:

Bandwidth is free for ISP's Or am I missing the fact that sending 100TB of data locally for free isnt the same to what ISP's do...

What? Bandwidth is free??? One of the stupidest things I've ever read on the internet. Hats off to you!

Bandwidth requires infrastructure (updating, replacing and expanding cable lines, new modems, etc), and the cables can only carry so much. The more you use, the less there is for your neighbors to use. Therefore, if one company is the major reason Comcast has to upgrade their infrastructure (so that all their customers get plenty of bandwidth), naturally they will want to get paid for it.

Now, I'm not saying Comcast isn't greedy or that this is a great thing. Just saying bandwidth is NOT free.

Relic Relic, TechSpot Chancellor, said:

This is a disappointing move by Netflix, which sadly is setting a dangerous precedent with what appears to be a pay-to-play between ISPs wanting to get paid on two fronts. Already saw that both AT&T and Verizon are in "negotiations" with Netflix to strike a similar deal.

traffic from Netflix during peak times accounts for around a third of all Internet traffic.

That's why this deal happened. Netflix is requiring a ton of bandwidth and Comcast is responsible for providing it. When internet connections slow down because of high traffic Comcast will get the blame, and they will have to pay for the upgrades and the maintenance on the networks Netflix is using so much of. I'd much rather Comcast go after Netflix for this cost rather than it's customers.

From what I understand this appears to be a peering and transit issue between three parties (Netflix, Comcast, and the transit/CDNs) and the unwillingness of Comcast and other ISPs to properly invest in upgrades between themselves and these transit/CDNs, resulting in the degraded performances, forcing Netflix to deal with them directly. Customers and Netflix already pay, but the content isn't being properly delivered to us, even with ISPs consistently raising our rates.

In the short-term this may look like a good deal, but I fear this will result in higher prices when the uproar dies down. Not to mention the long-term impact this could have on minor players or new startups who may never get off the ground.

Terms of the deal were not disclosed although there's no doubt that Netflix investors will be clamoring to know how it will affect the company's bottom line. What's more, it will be interesting to see how the costs are passed along to subscribers.

We'll never know if any price change is because of this. Netflix would charge us more if they believe people will still pay for it. Remember when streaming was a free add-on to your DVD mail service? As they acquire more content and produce more of their own (House of Cards etc) they're going to charge more anyway. $8/month is a steal for what we get.

Netflix is going to start charging more regardless due to content providers pushing higher and higher costs onto them, which Comcast, with NBC Universal is now a part of by the way. It sadly won't get any better if they are forced to pay-to-play with every major ISP to deliver meaningful streaming quality.

Knowing Comcast, they will go after Netflix AND the customers.

Check out this story on Yahoo calling this deal a win for customers. The long and short of it is that customers won't get any rate hikes from Netflix because the deal allows Netflix to bypass intermediaries in their network. Netflix was paying them to get it's content to the ISPs and now they won't have to anymore. Instead (it sounds like) they're going to be paying Comcast for a direct connection.That means better Netflix service for the customers and no price hikes. The ones who get the short end are these intermediaries... whoever they are.

According to the same story, Comcast won't be raising any rates for any reason because of the acquisition with TWC. Because of all the scrutiny with regulators they are being extra careful not to upset anyone.

Netflix already has Open Connect which allowed willing ISPs for free to cache content locally but most major ISPs, especially those who compete with Netflix, including Comcast rejected. This deal forces Netflix to pay, and at least to me appears to be some form of bullying/extortion. But I'm sure Comcast was being more flexible with their negotiations due to their current acquisition of TWC to show regulators that they aren't using their market dominance, which will grow significantly with TWC, especially on the ISP level, to degrade a competitors service.

What everyone should be concerned about is the long-term and how that might impact you. We may eventually see higher prices being passed on to consumers, fewer choices with a pay-to-play scheme, possibly fragmented markets and a hit to future innovation.

Bye net neutrality.

It shall be missed. Just wait until XBLive and PSN work better with specific providers. There will be an uproar.

If anyone is to blame for castrating Net Neutrality, it is those lousy Republicans. Damn them to hell!

I'm not sure if this is a clear cut case of violating net neutrality as defined by the FCC (or was at least), but it's surely troubling with end-users receiving degraded performance, and the players each blaming one another for it. And don't believe the Republicans are the only ones who bear responsibility. Democrats may speak highly of net neutrality, but their actions haven't always aligned themselves with their rhetoric (shocking!). Both surely receive contributions from these industries so few ever directly challenge them unless public outrage outweighs said contributions. If we want something done, enough of us will have to stand up and say something before it's too late.

- My Incredible Long Two Cents

Relic Relic, TechSpot Chancellor, said:

So does this mean that any time any website or online service gains popularity the internet service providers can then extort money out of them? Which in essence puts those services at a competitive disadvantage due to increased costs. Is Facebook going to be charged for the traffic that goes to it's data centers? I'm sure Comcast / Verizon / Time Warner etc. are all eyeballing Google's pile of cash for access to youtube.

This is the single biggest civil rights issue of our times but no one even knows what's happening. If allowed ISP's will essentially make toll roads out of the entire internet, diminishing the "free-ness" and democracy of the internet as a whole. Unfortunately because regular consumers don't see what's happening there's very little that will stop these forces.

I don't think anyone knows the answers, but it is very concerning.

Tanstar said:

This is 2014 not 1960 where bandwidth is anything to be concerned about we can easily do unlimited bandwidth I mean bandwidth is nothing but a way to increase costs to consumers whilst the ISP is like "Damn these guys are paying for stuff that doesn't exist they dont even know bandwidth is a myth I mean we dont buy it from the makers of the internet. We are making a killing from these tards"

Oh $hit. It gets stupider. Bandwidth in 1960? Tell me all about that!

tonylukac said:

Good luck. Comcast download speed here in Darien IL at night is about 1M. Also, netflix to pay off verizon according to tweaktown:

[link]

Guest said:

I'm not sure if this is a clear cut case of violating net neutrality as defined by the FCC (or was at least), but it's surely troubling with end-users receiving degraded performance, and the players each blaming one another for it. And don't believe the Republicans are the only ones who bear responsibility. Democrats may speak highly of net neutrality, but their actions haven't always aligned themselves with their rhetoric (shocking!). Both surely receive contributions from these industries so few ever directly challenge them unless public outrage outweighs said contributions. If we want something done, enough of us will have to stand up and say something before it's too late.

- My Incredible Long Two Cents

Those Democrats you speak of are DINO. Real Democrats always practice what they preach and defend the public interest. Unfortunately, real Democrats are far and few between these days.

Guest said:

Netflix played host to 33 million subscribers in the US.

That's almost more than the population of my country including the millions of illegal immigrants. [image link]

Ghost410 said:

Capitalism says that someone will build bigger pipes and we'll subscribe to them to get our services at the faster rates we need.

Crony capitalism says that the government will grant de facto monopolies and the current providers and government officials will get richer and richer offering the same old crappy pipes running services slower and slower.

Guess which one we have in the US?

tipstir tipstir, TS Ambassador, said:

Been reported prices will start to go up by $2 bucks more from current $7.99 they have been testing plans. So right now choices would be a low: $6.99 to stream on one device and $9.99 to stream on 3 devices (this one would replace the current $7.99). Slap on tax on that $9.99 going to be over $10 bucks x 12 = $120 a year.

tipstir tipstir, TS Ambassador, said:

Digital Times has reported prices will start to go up by $2 bucks more from current $7.99 they have been testing plans. So right now choices would be a low: $6.99 to stream on one device and $9.99 to stream on 3 devices (this one would replace the current $7.99). Slap on tax on that $9.99 going to be over $10 bucks x 12 = $120 a year.

MilwaukeeMike said:

This is a disappointing move by Netflix, which sadly is setting a dangerous precedent with what appears to be a pay-to-play between ISPs wanting to get paid on two fronts. Already saw that both AT&T and Verizon are in "negotiations" with Netflix to strike a similar deal.

Did you read anything about this online? This whole comment section has blown up based on assumptions and prejudice. Check out the story on ABC News about it. There's no net neutrality issues... no strange deals that don't already exist in the industry.

Here are a couple excerpts ...

"Previously, Netflix was paying a firm that connects with Comcast, but with this new deal, the company is paying Comcast directly; and Netflix is likely paying less for this direct relationship" So... no reason to raise costs for customers.

"Hodel said he doubts that the deal is a significant new source of revenue for Comcast. " - No extra money for Comcast either...

"This isn't an issue about net neutrality per se, any fledgling media service will now feel compelled to deal directly with Comcast to match the experience that Netflix delivers. Hodel said. "Middlemen like Level 3 now have less scale to negotiate against ISPs like Comcast, so the prices and service levels they can offer to a new entrant aren't as good. I have to point out, though, that this type of dynamic isn't unique to this industry - there are lots of businesses where scale provides benefits to those firms that have it, to the detriment of those who don't."

Translated - New media companies would deal with Comcast instead of Level 3 because Level 3 will have less bargaining power now.

Can we forget about this now and please save the freaking out for something that actually matters?

Guest said:

If anyone is to blame for castrating Net Neutrality, it is those lousy Republicans. Damn them to hell!

Your guys have been in power for almost 5 years now. With 2 years of unrivaled power(House,WHouse,Senate) without republicans being able to block a vote. That's what led to the ACA, which seems to be working wonders. Tell me again how a party with a vote blocked minority can have an affect on net neutrality. If the Dems wanted it. They would get it. If you are going to play the blame game, at least blame the right people. Until then, quit infecting the net with your Kool-aid mentality.

Guest said:

If anyone is to blame for castrating Net Neutrality, it is those lousy Republicans. Damn them to hell!

Your guys have been in power for almost 5 years now. With 2 years of unrivaled power(House,WHouse,Senate) without republicans being able to block a vote. That's what led to the ACA, which seems to be working wonders. Tell me again how a party with a vote blocked minority can have an affect on net neutrality. If the Dems wanted it. They would get it. If you are going to play the blame game, at least blame the right people. Until then, quit infecting the net with your Kool-aid mentality.

wastedkill said:

Let me remind everyone that profit margins for ISP's is less than $0 the amount of $trillions it costs JUST to upgrade the systems to get a extra 10mb out of the current connection costs $9.8trillion dollars Google spent $107Trillion dollars upgrading to 1Gbps.

According to these statistics its no wonder ISP's are having a hard time breaking even and having to charge netflix for not throttling lets not forget comcast gets fined $9.8billion for accepting netflix's Free content server free of charge for $9.8billion fine so hence why they didnt accept it.

Also lets take into account 1Gbps from google costs $80 a month which is $79.99 expensive for consumers to pay hence why Comcast cant upgrade their services from the 1980's.

Comcast got a 28% jump in subscriptions, no wonder they cant pay to upgrade the systems to accomodate the futures growth specially with only getting a measly $8billion profit which is nothing compared to how much it would cost to upgrade the systems($15.9trillion), I am amazed google has managed to pull it off soo easily unlike comcast.

Guest said:

Google spent $107Trillion dollars upgrading to 1Gbps.

Are you kidding me? 107 Trillion dollars? Google as a company is only worth an estimated 270 Billion. What orifice did you pull those numbers out of?

wastedkill said:

Are you kidding me? 107 Trillion dollars? Google as a company is only worth an estimated 270 Billion. What orifice did you pull those numbers out of?

Well people think it costs that much to ugprade stuff so I am just playing along to their silly game, Comcast has ZERO problem upgrading systems to accommodate future changes yet people cry like they cant afford it as it cost trillions of dollars (not, $100mill max will add atleast 100PB bandwidth)

Relic Relic, TechSpot Chancellor, said:

Did you read anything about this online? This whole comment section has blown up based on assumptions and prejudice. Check out the story on ABC News about it. There's no net neutrality issues... no strange deals that don't already exist in the industry.

Can we forget about this now and please save the freaking out for something that actually matters?

My post never said it violated net neutrality, at least the way the FCC views it with its Open Internet guidelines. There are many that do feel it violates the spirit of net neutrality and its origins which I agree with. Now this deal by itself is by no means the be all, end all of the internet as we know it and in the short term will surely benefit Comcast customers. What worries me however is the precedent this sets and the long term consequences of it. Arstechnica has a good followup on this very real issue.

MilwaukeeMike said:

My post never said it violated net neutrality, at least the way the FCC views it with its Open Internet guidelines. There are many that do feel it violates the spirit of net neutrality and its origins which I agree with. Now this deal by itself is by no means the be all, end all of the internet as we know it and in the short term will surely benefit Comcast customers. What worries me however is the precedent this sets and the long term consequences of it. Arstechnica has a good followup on this very real issue.

Yes, it looks like an issue, but not for the customer. They talk about the barriers to entry for a new carrier because Comcast is able to make service deals because of their size. So we get better service at the price of new ISPs having trouble competing. Sounds like a similar sort of effect Walmart has on the city. They can put the little guy out of business but it means better prices for the customers.

The difference here though is the 'little new ISP' is hypothetical for the most part. You can't really start an internet service like you can open a grocery store.

tipstir tipstir, TS Ambassador, said:

COMCAST too much in control and the FCC needs to regulate the rules as no one owns the internet was wide open years ago. But COMCAST wants a huge profits so they forced Netflix to give some our money to COMCAST so they don't throttle down the connection speed through their customers who don't want to use COMCAST over pricing CATV services.

Relic Relic, TechSpot Chancellor, said:

Yes, it looks like an issue, but not for the customer. They talk about the barriers to entry for a new carrier because Comcast is able to make service deals because of their size. So we get better service at the price of new ISPs having trouble competing. Sounds like a similar sort of effect Walmart has on the city. They can put the little guy out of business but it means better prices for the customers.

The difference here though is the 'little new ISP' is hypothetical for the most part. You can't really start an internet service like you can open a grocery store.

They are talking about all services, not just carriers. And I find this can very much adversely affect consumers, especially if this turns into a norm. Your Wal-Mart analogy isn't really applicable either, as Wal-Mart does not control the roads, how traffic flows over those roads, or the overall real estate picture of a given location. Comcast and the other ISPs however do in this scenario, and to top it off they have a business interest that runs in conflict with many of the services they are targeting.

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