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Netflix Blinks, Will Pay Comcast For Network Access
We've mentioned several times the tension between giant streaming sources (especially Netflix), and ISPs (especially Comcast, especially given that it may merge with Time-Warner). Now, Marketwatch reports that Netflix has agreed to pay Comcast (amount undisclosed) for continued smooth access to Comcast's network customers, "a landmark agreement that could set a precedent for Netflix's dealings with other broadband providers, people familiar with the situation said." From the article:
"In exchange for payment, Netflix will get direct access to Comcast's broadband network, the people said. The multiyear deal comes just 10 days after Comcast agreed to buy Time Warner Cable TWC -0.79% Inc., which if approved would establish Comcast as by far the dominant provider of broadband in the U.S., serving 30 million households" I wonder how soon until ISPs' tiered pricing packages will become indistinguishable from those for cable TV, with grouped together services that vary not just in throughput or quality guarantees, but in what sites you can reach at each service level, or which sports teams are subject to a local blackout order.
You pay for a general internet access, not a specific, resource consuming, service.This is basic peering agreement where Netflix is sending more traffic to Comcast than Comcast is sending to Netflix. Bandwidth is not free. As such, either you want Netflix to free-ride over Comcast investment, or you agree for the asymmetry to be compensated to Comcast.