The deal is very similar to the one stuck between Netflix and Comcast recently. It means Netflix will pay Verizon for direct access to its broadband networks, avoiding more congested routes that can lower the quality of service for Netflix users trying to stream films and TV shows.
Such deals are signed by Netflix reluctantly, and the service still maintains it is not its responsibility to pay for bandwidth usage of broadband provider's customers. In the past, Netflix has even offered to pay for equipment to help deliver videos more efficiently but broadband companies want them simply to pay for prioritized access.
Verizon, Comcast and others say that Netflix puts considerable strain on the "last mile" connections to customers' homes. This has been growing problem as bandwidth usage in the United States increases with more digital content delivery services being used, and that leaves open the question of who is responsible for paying for necessary upgrades.
Netflix CEO Reed Hastings thinks he knows who should pay; the cable companies. After all, he argues, their customers are trying to use Internet based services through broadband connections that they pay considerable fees for every month.
Still, Netflix' own data showed vast improvements when it gained direct access to Comcast's networks, so at least Verizon customers should be able to expect similar improvements in performance due to this deal. The debate, and the battle, are still very much on behind the scenes. Maybe Francis Underwood can help?
Written by: James Delahunty @ 29 Apr 2014 7:46