Netflix, Verizon reach deal on streaming traffic

 

Netflix has reached a deal with Verizon to ensure subscribers get speedy Internet service, months after announcing a similar deal with Comcast.

The streaming video company has blasted “interconnection” deals in the past, but that didn’t stop it from signing one with Verizon, The Hill has confirmed.

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Terms of the deal were not released, but it likely mimics the February arrangement Netflix signed with Comcast, to allow the streaming service to connect directly to the cable giant's network. The Comcast deal quickly led to faster service for Comcast subscribers but was denounced as a “toll” and an “arbitrary tax” by Netflix CEO Reed Hastings.

"If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future,” Hastings wrote in a blog post shortly after the deal.

At peak times, Netflix can reportedly account for a third of all downstream traffic in North America, which can slow down people’s service.

The deal comes as the Federal Communications Commission (FCC) weighs a new proposal on “net neutrality,” the concept that all traffic should be treated equally online.

The commission’s previous rules, which were tossed out by an appeals court earlier this year, allowed for interconnection deals like the ones Netflix has been signing, though it prohibited other forms of discrimination. The new order being floated by FCC Chairman Tom Wheeler would require Internet providers to give a baseline level of service to all websites but would let companies enter into business deals to boost the speed for subscribers visiting their sites.

The proposal has met with harsh criticism from both sides of the aisle, as well as from online freedom advocates and a host of Web companies, including Netflix.

The Internet Association, which includes Netflix as well as Twitter, Facebook, Google and other Web titans, on Friday said it was worried that the new plan is a departure “from the history of the free and open Internet by allowing broadband gatekeepers to decide what websites run the fastest.”