Netflix Inks Fast Lane Deal With AT&T But Pledges To Fight Against Them

Netflix has signed a deal with AT&T to provide a so-called "fast lane" that will improve Netflix's streaming video performance for end users on AT&T's network. The companies emailed us a joint statement that reads in part, "We reached an interconnect agreement with AT&T in May and since then have been working together to provision additional interconnect capacity to improve the viewing experience of our mutual subscribers."

The statement also notes that the entire process for bringing those connections on will be complete within days. Netflix has similar deals in place with Verizon and Comcast.

These interconnect deals ostensibly will provide better streaming performance for Netflix customers using those ISPs, but the whole notion flies in the face of net neutrality. Netflix, for its part, has been a strong supporter of net neutrality, and these deals are antithetical to that stance.

It's not a pretty place for Netflix to be; the company comes off looking weak, or hypocritical, or significantly hurting the campaign for net neutrality, or some combination thereof. However, the company claims that the interconnect deals are a temporary necessary evil to which it must acquiesce in order to provide the service for which its customers are paying.

"We believe consumers should get the Internet they purchased without content providers being forced to pay access fees to reach them," Netflix spokesperson Anne Marie Squeo told us. "We reluctantly agreed to pay an interconnection toll to just a handful of the largest U.S. ISPs to ensure Netflix members have the great viewing experience they expect." She added that 99 percent of their arrangements with ISPs don't require access tolls.

In other words, Netflix is saying that it is protecting us by making distasteful deals to ensure that customers aren't getting hosed by ISPs throttling their networks.

Of course, the immediate question is whether Netflix is simply going to charge everyone more money to cover these costs. Squeo says no. "To date, we have not passed these costs onto subscribers," she said.

That may be true, although it is worth noting that Netflix announced back in May that it is raising subscription fees by $1 per month for all new members; current members will see the price increase in two years. That's not a significant jump, really--especially for the unlimited content that you get--but it is an increase nonetheless.

To be fair to Netflix, the company has kept costs quite low for customers all along, so this bump could be chalked up to the rising costs of doing business (such as the impending upgrade to 4K content). Further, Netflix has been forceful with the FCC over the net neutrality issue, most recently when it published its comments on the agency's proposed rules just days ago.

Still, there's a war being waged over the Internet, and Netflix is currently at the center of it, walking a fine line while awkwardly positioned between its customers, ISPs, and the FCC--an unenviable place to be, but certainly an important one.

Follow Seth Colaner @SethColaner. Follow us @tomshardware, on Facebook and on Google+.

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  • ubercake
    The cable companies are paying politicians big money to have the ability to limit speeds based on content. On top of it, the guy in charge of the FCC (wheeler) was one of the top lobbyists for cable and wireless companies. It's a win-win for big business!
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  • ubercake
    The cable companies are paying politicians big money to have the ability to limit speeds based on content. On top of it, the guy in charge of the FCC (wheeler) was one of the top lobbyists for cable and wireless companies. It's a win-win for big business!
    12
  • InvalidError
    Verizon and other major ISPs getting forced into massively increasing peering with Netflix's transit-provider-of-the-day would not be healthy network management practice for the large ISPs. It is not very healthy for Netflix either since betting their barn mostly on L3 and Cogent could leave them screwed big time if they get into a dispute with either of them.

    If Netflix wants to solve their transit issues with major ISPs without having to deal directly with those ISPs, they should be seeking transit and peering deals with the large ISPs' other peers who have large amounts of under-used peering capacity with the major ISPs... or tell L3, Cogent, etc. to do that for them so Cogent/L3 have alternate routes to forward excess traffic on.
    -2
  • skit75
    These deals will most certainly be used against content providers by the ISPs when that battle happens. You can say you are for Net Neutrality but your actions say otherwise.

    As far as 4k goes, there isn't even a posted usage statistic on the web or on Steam according to the wiki page http://en.wikipedia.org/wiki/Display_resolution

    Furthermore, the bandwidth required to sustain a 4k stream(~15Mbps) still requires twice the average US household current rating (~7.4Mbps) http://bgr.com/2013/09/26/netflix-4k-streaming/
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