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Netflix move reportedly paying off

Netflix website

SAN FRANCISCO (AP) - Netflix's videos are streaming through Comcast's Internet service at their highest speeds in 17 months, thanks to tolls Netflix pays Comcast for a more direct connection to its network.

The data released Monday by Netflix Inc. provide a concrete example of the special access that money can buy amid a debate about whether the Federal Communications Commission should draw up new rules to ensure that all online content providers are treated the same by Internet service providers.

The equal-treatment doctrine, known as net neutrality, has become a thornier topic since January when a federal appeals court overturned the FCC's regulations on the issue. Net neutrality is also drawing more attention as Comcast tries to gain approval of its proposed $45 billion purchase of Time Warner Cable Inc., another largest Internet service provider.

As the world's largest Internet video subscription service, Netflix has long supported net neutrality as a way to prevent online service providers from giving better treatment to websites willing to pay additional fees for the privilege. Nevertheless, Netflix agreed in mid-February to pay an undisclosed sum to Comcast Corp. to create a new avenue for its videos to reach Comcast's service.

The toll produced an immediate dividend for the Netflix subscribers who are among the nearly 21 million households and businesses that rely on Comcast's high-speed Internet service to watch movies and television shows.

Comcast delivered Netflix video at an average rate of 2.5 megabits per second during March. That was a 66 percent increase from a recent low of 1.51 megabits per second in January.

The March performance also topped the previous monthly high of 2.17 megabits per second that Netflix had recorded on Comcast. Netflix began tracking the streaming speeds of Internet service providers in November 2012.

Higher streaming speeds allow users to take advantage of higher quality video offerings and translate to fewer interruptions in the picture.

That's good news for Netflix because higher-quality video should please many of its 33 million U.S. subscribers who pay $8 per month for the company's video streaming servicer. But that doesn't necessarily mean the Los Gatos, Calif. company is happy about the circumstances that prodded it into Comcast partnership.

Netflix CEO Reed Hastings has steadfastly insisted that his company and other online content providers shouldn't have to pay additional tolls to Internet service providers, or ISPs, already charging their customers $40 to $60 per month.

Comcast and other broadband providers contend Netflix's growing popularity should require the company to shoulder some of the financial burden for delivering its video. In evening hours, Netflix's U.S. subscribers generate nearly a third of the Internet's downloading activity, according to the research firm.

By early this year, Comcast's streaming of Netflix video had slowed to the point that Hastings felt compelled to pay the toll to retain his company's subscribers.

The special access that Netflix is getting from Comcast is known as "interconnection," a term referring to digital content's journey to an Internet service provider's gates. That path technically isn't covered by the current definition of Net neutrality, which refers to how service providers treat digital content once it's inside the gates.

Comcast has promised to honor the previous rules governing Net neutrality, at least for the next few years. In a blog post last month, Hastings argued that future Net neutrality guidelines should be expanded to address interconnection issues too.

"Without strong net neutrality, big ISPs can demand potentially escalating fees for the interconnection required to deliver high quality service," Hastings wrote. "The big ISPs can make these demands - driving up costs and prices for everyone else - because of their market position."

Even with the March improvements, Comcast's delivery of Netflix content lags behind other major service providers. Cablevision, Cox, Suddenlink and Charter each delivered Netflix video at higher speeds than Comcast in March, according to Monday's breakdown. Netflix has interconnection deals with Cablevision, Cox and Suddenlink, although those arrangements don't require Netflix to pay fees.

When Netflix announced its deal with Comcast, both Verizon Communications and AT&T Corp. expressed interest in reaching similar alliances. No deals with Verizon or AT&T have been announced yet.

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jamesweathers5 April 14 2014 at 9:06 PM

I am a netflix customer has been for many years. With that said Netflix come up with something to reward your long-term customers keep your family happy.

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Mary E & William April 14 2014 at 8:32 PM

The large internet providers are way too greedy. They took all the Land Lines from the big telephone company and became the big greedy telephone, cable, and IP company. In many areas they have little to no competition. I hope they see the had writing on the wall. Technology is moving a warp speed and may overtake the cable company with wireless. I think it would be a great time to unload any Time Warner or Comcast stock.

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revivalman April 14 2014 at 7:41 PM

I use Verizon. So how much is my monthly Netflix charge going to increase so the people using Comcast can stream movies faster? Congress better get off their lazy asses and rewrite the net neutrality law to level the playing field again.

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Lucia April 14 2014 at 7:12 PM

I LOVE NETFLIX!!!!!!!!!!!!

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glddustent April 14 2014 at 7:08 PM

Ilove Netflix. However, PLEASE put the romantic film (directed by: Modonna) "WE" back up HUGE mistake to take it down. It's such a good date- night flick.

Also, please put "Sexy Beast" back. mistake to take it off. IT 'S SUCH A GREAT film an especially

Thank you in advance,

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beverlyamy1 April 14 2014 at 3:33 PM

imo,netflix is far better for classic tv shows than the movies that are on it,hulu also and crackle.

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anirschl April 14 2014 at 3:55 PM

Netflix used to have tons of Mystery Science Theater episodes and other items that were hard to find but removed almost everything interesting...so I removed Netflix

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hd13409 April 14 2014 at 2:17 PM

now only if they play better movies

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gunlyn April 14 2014 at 2:31 PM

I would like to see more up to date movies.. I know for more money you can get the dvd in the mail, why cant we do that with people who don't want the dvd coming thru the mail.... thanks for listening

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fibblefester April 14 2014 at 3:49 PM

Netflix has successfully perpetrated one of the largest consumer scams in decades. They sold their service as being HD capable, but in reality they were not. They took tens of millions from their customers who suffered through constant black outs, resolution shifts to sub-VHS quality and more. All the while selling their product as HD. They owe every customer a year's worth of free service or just an outright rebate. Or better yet, the Feds should investigate and penalize, if not shut down, these crooks.

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1 reply
shmtnmusic fibblefester April 14 2014 at 6:40 PM

Did you not read that Comcast was throttling the speed of Netflix as a way to demand more money from Netflix? If you want to complain about speed, direct it at Comcast.

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