UPDATE, 2:53 PM: DC-based public interest group Public Knowledge raised its concerns over the Netflix-Comcast deal in a statement Sunday. Said John Bergmayer, Senior Staff Attorney at Public Knowledge:
“No one on the outside knows what is happening in this market. However, it is clear that residential ISPs should be in the business of charging their users for access the Internet, not of charging the rest of the Internet for access to their users. This ensures that they are putting the needs of their users first.
From what information is public, it appears that the largest ISPs are demanding payment from networks that deliver content and services that residential broadband consumers demand. Because the large residential ISPs themselves are the ones keeping the terms of their deals secret, it is raises the question of whether they have something to hide.
One way to prevent competitive problems from arising, and to reduce the need for future regulation, is to prevent ISPs from holding other networks hostage. This raises concerns in light of the proposed Comcast/Time Warner Cable merger.
“What has characterized these traffic disputes has been their opacity. We call on the Federal Communications Commission, the Department of Justice, and interested members of Congress to ensure that the broadband market continues to meet the needs of its users, and allows companies like Netflix (and the next Netflix) to offer the services that users have demonstrated they want.”
PREVIOUS, 10:06 AM: There may be smoother streaming ahead for Netflix subscribers as Netflix has agreed to pay Comcast for direct broadband access. Comcast had previously denied Netflix’s request to connect to its broadband network free of charge, sending Netflix users’ streaming content through third party internet providers to access Comcast’s network. Customer streaming speeds suffered, dropping by 27% since October. Per WSJ, Netflix CEO Reed Hastings and Comcast CEO Brian Roberts worked out a long-term “paid peering” deal at last month’s CES in an agreement that could mean more spending for Netflix as other broadband providers including AT&T, Verizon, and new Comcast acquisition Time Warner Cable also hold out for payment. In a joint statement issued Sunday morning, the companies formally announced their new “mutually beneficial interconnection agreement”: “Working collaboratively over many months, the companies have established a more direct connection between Netflix and Comcast, similar to other networks, that’s already delivering an even better user experience to consumers, while also allowing for future growth in Netflix traffic. Netflix receives no preferential network treatment under the multi-year agreement, terms of which are not being disclosed.”