Feb 23 Netflix has agreed to pay one
of the largest broadband providers in the United States Comcast
Corp for faster speeds, throwing open the possibility
that more content companies will have to shell out for better
Comcast and Netflix made the joint announcement on Sunday,
marking the first time that Netflix is paying for faster speeds
in the U.S. after customers complained about slow service. Terms
of the deal were not disclosed.
The arrangement comes as federal regulators are wrestling
with an issue known as "Net neutrality" concerning broadband
providers and whether they can slow down traffic to particular
websites, potentially forcing content companies to pay for
faster Web service.
The Federal Communications Commission said last week it
plans to rewrite the rules after a U.S. court struck down the
commission's previous version.
The issue is being closely watched as millions of people
view movies and TV shows through streaming services offered by
such companies like Netflix and Amazon.
Netflix, which got its start as a DVD-by-mail service, has
44 million subscribers worldwide and 34 million in the U.S.
alone. About 7 million subscribers pay for mail delivery
The companies said in a statement that they have been
"working collaboratively over many months" to strike a
multi-year agreement. Netflix will not receive preferential
network treatment, the companies said.
As part of the deal, Netflix will deliver its movies and TV
programs to Comcast's broadband network directly as opposed
through third party providers, giving viewers faster streaming
speeds for watching movies and TV programs.
It also could force Netflix to strike similar arrangements,
known in the industry as interconnect agreements, with other
major broadband providers like Verizon and AT&T.
With more than 44 million subscribers throughout the world,
Netflix has been making an effort to connect directly with
broadband Internet providers. It has struck similar deals with
Cablevision and Cox, though Netflix did not pay for
The arrangement with Netflix comes on the heels of Comcast's
agreement to buy Time Warner Cable for $45 billion, a
deal that will draw the scrutiny of U.S. antitrust enforcers.
The combined company would have a near 30 percent share of
the U.S. pay television market, as well as be the major provider
of broadband Internet access.