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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.

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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!
    Reply
  • 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.
    Reply
  • 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/
    Reply
  • somebodyspecial
    TV's and monitors are two different things skit75. Tv's are being sold quite at bit already at 4K, and that will grow FAR faster than any steam survey will show for monitors which pretty much requires 2+ top gpus in your machine. I'll buy a 4K tv long before a 4K monitor just because of the card costs.
    Reply
  • Achoo22
    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...

    This is such a broken way of viewing the situation. If I'm growing a .com business, I start with a basic ISP. When my traffic volume requires it, I upgrade to a co-located server with a major backbone company. When demand warrants, I expand by adding more co-located servers. But instead of picking a single ISP that suits my needs, you'd have me ink deals with every ISP that every potential customer might use?

    Sure, Netflix uses a fair amount of bandwidth... but it isn't just spamming it at random, it is in response to requests from clients - clients whose ISPs aren't fulfilling their needs. For that matter, there's no reason to believe that it's truly a bandwidth issue instead of an extortion issue. You talk about network health and provider choices as though they are rigid, immutable things - in fact, most of these contested congestion points are in over-engineered locations where making changes isn't much more complicated than adding patch cables to your local network at home.
    Reply
  • InvalidError
    13861384 said:
    This is such a broken way of viewing the situation. If I'm growing a .com business, I start with a basic ISP. When my traffic volume requires it, I upgrade to a co-located server with a major backbone company.
    If you are co-locating servers in a remotely good datacenter that provides transit brokerage, you usually have access to a blended mix of 5-10 peers and transit providers instead of being limited to "choosing" only one like Netflix here heavily favoring L3... for now.
    Reply
  • skit75
    13860663 said:
    TV's and monitors are two different things skit75. Tv's are being sold quite at bit already at 4K, and that will grow FAR faster than any steam survey will show for monitors which pretty much requires 2+ top gpus in your machine. I'll buy a 4K tv long before a 4K monitor just because of the card costs.

    That data also contains web usage, not just Steam. Are the 4k TV's not "smart"? They don't have web apps like Hulu, Amazon Prime and Netflix built in? Just about every Blu-Ray Disc player, console and TV has this.
    Reply
  • somebodyspecial
    13878405 said:
    13860663 said:
    TV's and monitors are two different things skit75. Tv's are being sold quite at bit already at 4K, and that will grow FAR faster than any steam survey will show for monitors which pretty much requires 2+ top gpus in your machine. I'll buy a 4K tv long before a 4K monitor just because of the card costs.

    That data also contains web usage, not just Steam. Are the 4k TV's not "smart"? They don't have web apps like Hulu, Amazon Prime and Netflix built in? Just about every Blu-Ray Disc player, console and TV has this.

    I was talking about steam survey data which covers users coming to Valve's site. It's PC data and what we use to access their site (IE, monitors and pc components). I didn't say anything about Tv's being smart or not, or them missing apps that run streaming vids. I agree the all newer TV's include all those apps now, which is why they will take off first as I noted and why I'll buy one of them probably long before buying a 4K monitor which takes two cards or more to run effectively in almost all cases if amping up the details. You don't have to spend $1000-2000 on vid cards to run 4k on your TV. You just buy a 4K TV and wait for content to consume. Again, this is why I'll buy a TV first.

    Also I don't know many people using their Tv to browse (not that you can't do it, just far worse than on a PC etc).

    Steam data doesn't care about netflix, amazon or hulu so I don't get your point. It cares about what you access steam client with. But my point is, 90% of the public will buy a 4K TV long before a 4K monitor as shown by steam already with 98% of us using a res of 1920x1200 or below still today and most of the people in the 2% above this are using multiple cards which their steam data also shows. TV's are smart and come with apps, what's your point? I'm in those apps every day on my bluray, roku or tv. What does that have to do with TV's and monitors being totally different animals in how they're used 90% of the time with 4K stuff? You watch content on TV's, and usually play games with vid cards that would be required to push a 4K monitor. Just as 1440p is a niche right now (mostly due to needing multiple cards to really push them), 4K will be even slower to adopt without some huge increase in perf on discrete gpus. Maybe @14nm this will be doable in a single chip card, but even then not a lot I think. I definitely don't think 20nm will do much more than bring 1440/1600p into reality which today even on 780ti can bring the pc to it's knees and be well under 30fps maxed out.
    Reply
  • skit75
    We agree more than we disagree.

    I get that TV's and monitors are very different. I was just pointing out that right next to that Steam column is a Web Usage Column with data gathered from visitors to 3 million websites. Browsers built into the 4k TV's would likely be included in that data.

    DirecTV will be broadcasting 4k content ~ 2016 via two new launched satellites. This service won't be cheap for the early adopters. Certainly, no where near the extra $10.00/month they charge right now for 1080p content, on top of your subscription fee. Services like NetFlix, Hulu, Prime have an advantage here because they can already deliver streaming content via existing internet connection if you're fortunate enough to be able to sustain 20Mbps+ connections. Netflix says the bitrate is 15-18Mbps but recommends a 50Mbps connection for 4k content. The average US household is ~7.4Mbps.

    I'm lucky enough to get 120Mbps from Cox @ $68.00/month and I've seen it burst to 170Mbps but I am no where near buying a 4k TV or monitor
    Reply
  • somebodyspecial
    13897293 said:
    We agree more than we disagree.

    I get that TV's and monitors are very different. I was just pointing out that right next to that Steam column is a Web Usage Column with data gathered from visitors to 3 million websites. Browsers built into the 4k TV's would likely be included in that data.

    DirecTV will be broadcasting 4k content ~ 2016 via two new launched satellites. This service won't be cheap for the early adopters. Certainly, no where near the extra $10.00/month they charge right now for 1080p content, on top of your subscription fee. Services like NetFlix, Hulu, Prime have an advantage here because they can already deliver streaming content via existing internet connection if you're fortunate enough to be able to sustain 20Mbps+ connections. Netflix says the bitrate is 15-18Mbps but recommends a 50Mbps connection for 4k content. The average US household is ~7.4Mbps.

    I'm lucky enough to get 120Mbps from Cox @ $68.00/month and I've seen it burst to 170Mbps but I am no where near buying a 4k TV or monitor

    Agree, we don't differ much here. I too have cox (50Mbps unlimited plan $100) and pretty much get that all day (4.4MB/sec or so, with business plan). I will admit I'll be trying my best to browse on that 60in+ TV any way I can to lower time on the PC (hopefully with some mouse keyboard combo that works via phone/tablet hooked to the tv with HDMI or Miracast or something). The older I get you get fat feet after 8hrs at work + another 4-6 at home and worse on weekends sometimes with a hit new game etc...LOL.

    Enjoy your day :)
    Reply