Netflix cuts deal to pay Verizon for direct access

Even as it continues to wage war with Comcast (NASDAQ: CMCSA)--including openly opposing the $45.2 billion merger between the nation's top MSO and Time Warner Cable (NYSE: TWC)--Netflix (NASDAQ: NFLX) is paying to improve its working relationship with Verizon (NYSE: VZ).

According to multiple reports, Netflix has agreed to pay Verizon to guarantee faster access on its broadband networks, ensuring that Netflix and Verizon customers get a better streaming experience. Neither side would say how much this will cost, but a Netflix spokesperson confirmed the deal to techradar.

"We have reached an interconnect arrangement with Verizon that we hope will improve performance for our joint customers over the coming months," the spokesperson said.

Which, of course, begs the question of why Netflix has been openly rancorous about paying for better access to ride on Comcast's networks, as evidenced by a recent blog item written by Ken Florance, vice president of content delivery at Netflix, complaining that Comcast was forcing Netflix to pay for better access.

As part of the blog item, Florance produced a chart "which shows how Netflix performance deteriorated on the Comcast network and then immediately recovered after Netflix started paying Comcast (for direct interconnection) in February."

Comcast isn't the only broadband pipe with which Netflix takes issue. In a letter to shareholders accompanying second quarter earnings, Netflix CEO Reed Hastings and CFO David Wells said AT&T's (NYSE: T) fiber-based U-verse service "has lower performance than many DSL ISPs such as Frontier, CenturyLink and Windstream" and suggested "it is free and easy for AT&T to interconnect directly with Netflix and quickly improve their customers' experience, should AT&T so desire."

For more:
- techradar has this story
- and Bloomberg has this story

Related articles:
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Reported net neutrality changes roil consumer advocates, send Wheeler into defensive mode
AT&T tackles online video market with Chernin Group joint venture, $500M pledge
Netflix opposes Comcast-TWC merger, raises subscription by up to $2 in some markets

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