Netflix to pay Comcast for bandwidth, probably pass the costs onto you (UPDATED)

By Kyle Ryan | February 24, 2014 | 11:15pm

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As news reports on Netflix like to point out, the company’s streaming services can account for up to 30 percent of all Internet traffic during peak hours, which is both impressive for Netflix and also possibly a millstone around its neck. Last week, the web was abuzz with lackluster Netflix playback quality, and a long article on Ars Technica explained the situation: ISPs are essentially penalizing Netflix for gobbling up so much bandwidth by not upgrading infrastructure to carry the traffic. It all involves ports, packets, and some other Internet jargon that’s tough to parse; Leslie Horn at Gizmodo has a nice layman’s analysis of the Ars Technica story.

Put simply: Netflix buys bandwidth from middle-man companies (like Cogent Communications, whose CEO was interviewed in that Ars Technica story), who then deliver the content to ISPs like Verizon, Comcast, and AT&T. Neither side pays for this, because it benefits both of them: As Ars Technica points out, Cogent gets to carry Netflix, and Verizon gets the content its customers want. But the big ISPs don’t like this arrangement anymore, and they want someone to pay up.

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That someone is Netflix. Today it was announced that the company has agreed to pay Comcast—the country’s largest ISP—for “faster and more reliable access” to Comcast customers, according to The New York Times. It’s an unprecedented deal—one that likely wouldn’t have happened before a federal appeals court struck down the FCC’s net-neutrality rules, which supposedly ensure all content providers have the same access to consumers—and probably a sign of things to come.

What does that mean for you, someone who just wants to watch Orange Is The New Black in HD without any goddamn pixellating? You’ll probably be footing the bill when Netflix passes the costs onto users. And it could spell trouble for the Netflixes of tomorrow, as the Times notes:

One fear is that if such deals become common, only the wealthiest content companies will be able to afford to pay for them, which could stifle the next Netflix from ever getting off the ground.

In the meantime, Comcast customers rule the world of Netflix streaming, at least until more of the deals happen. Congrats on being on the winning team, guys.

UPDATE, 2/25: StreamingMediaBlog.com’s Dan Rayburn posted a long take-down of media coverage of the Comcast/Netflix deal Sunday night, explaining that most outlets were getting fundamental parts of the agreement wrong. For instance, Rayburn suggests that no additional costs will be passed along to the consumer, because instead of paying a middle man for access to Comcast subscribers, Netflix is simply paying Comcast—it’s cost that’s already built into what subscribers pay. Second, and this is a more contentious issue, Rayburn says the Comcast/Netflix deal doesn’t affect net neutrality:

Commercial interconnect relationships, also referred to as paid peering agreements, have been around since the Internet started, and it’s how the Internet works. Commercial interconnect deals have NOTHING TO DO WITH NET NEUTRALITY.

Plenty of people in the comments of Rayburn’s story take issue with that assertion (and some of his other points); if you’re interested in going down a jargon-loaded rabbit hole of network-speak until your eyes glaze over, have at it. This is an incredibly complicated story, which means if Orange Is The New Black isn’t playing in HD for you, there are a lot of people to blame, not just your Internet provider. Maybe it’s time just to go back to DVDs.