Verizon CEO expects Netflix will pay for faster speeds - CNBC

Mon Feb 24, 2014 11:50am EST

Feb 24 (Reuters) - Verizon Communications' chief executive said on Monday he expects Netflix will pay the telecom company for faster speeds after Netflix customers complained about slow connections to stream TV shows and movies with Verizon's FiOS service.

This sets up the possibility that Netflix will have to pay another big broadband provider for a faster connection after striking a similar deal with Comcast Corp on Sunday.

Verizon CEO Lowell McAdam said on CNBC, where he discussed Verizon's talks with Netflix, that the two companies have been in negotiations for a year.

The deal hinges on whether Netflix can set up direct access to Verizon, known as an "interconnect agreement", rather than go through a third party.

Netflix's willingness to pay for faster speeds throws into question whether more media companies will have to follow suit.

Verizon provides millions of U.S. customers with its FiOS broadband service and Netflix speeds have slowed on that network in recent months, leading to complaints.

Federal regulators are wrestling with the issue known as "net neutrality" that concerns broadband providers and whether they can make content companies pay for faster service.

"It shows you don't necessarily need a lot of regulation in a dynamic market here. Doing these commercial deals will get good investment and good returns for both parties," McAdam said.