Netflix strikes deal with Comcast for direct access service, according to WSJ

According to the Wall Street Journal, Netflix and Comcast have signed a multiyear paid contract allowing the video streaming service a more direct route to Comcast's network. The first indications of the new agreement came when App.net founder Bryan Berg noticed more direct traceroutes from the service, but Journal sources indicate the change is the result of a formal agreement between the two companies, and money has indeed changed hands. (Update: Comcast has confirmed the scope of the deal without mentioning any financial aspect.)

The result comes after a number of troubling moves by Comcast, which had seen Netflix speeds plummet on the network, as reflected in the service's monthly ISP rankings. Comcast has sworn it isn't throttling Netflix traffic, but the simple fact is that Netflix traffic has grown increasingly difficult to deliver onto Comcast's network, while other ISPs see little degradation. As analyst Rich Greenfield put it, "How come Time Warner is showing solid Netflix performance without paid peering?"

One answer is that Netflix's data delivery service, Cogent, has faced increasing difficulty moving all of Netflix's traffic through the existing Comcast connections, a problem it does not face with smaller providers like Time Warner. At the same time, providers like Cablevision have solved the problem by signing up for Netflix's OpenConnect service, which offers direct access for free. It's good news for Cablevision customers, who see faster download times, but it also means the Cablevision network has to bear a larger data load. Comcast and Verizon have publicly refused to sign up for OpenConnect. After this latest deal, it seems as if the central issue is payment, effectively holding Netflix subscribers on their network hostage unless the service agrees to pay for a better connection.

Source: Wall Street Journal;