& cplSiteName &

Netflix Adds AT&T to Pay-to-Peer List

Mari Silbey
7/30/2014
50%
50%

In the latest chapter in the net neutrality saga, Netflix has snared a paid interconnection agreement with AT&T in an attempt to improve video quality for AT&T's Internet subscribers, similar to Netflix's earlier deals with Comcast and Verizon, Mashable reports.

Despite a steady stream of invective between Netflix Inc. (Nasdaq: NFLX) and the service provider community, the online video company continues to add to its list of paid peering deals across the US. These direct connections with last-mile Internet providers ensure that Netflix's video programming has a clearer path to consumers, increasing the quality of service and improving the company's relationship with its customers. (See Blog Wars: Verizon, Level 3 Duke it Out.)

Paid peering agreements are only one way that Netflix optimizes online video delivery. The company also partners with transit providers such as Cogent Communications Holdings Inc. (Nasdaq: CCOI) and Level 3 Communications Inc. (NYSE: LVLT), and it works with some ISPs to install caching appliances in the last-mile network.

However, the paid interconnection agreements with ISPs have sparked controversy because they illustrate the fact that content companies can buy premium access to Internet subscribers. Opponents say these connections create Internet fast lanes, and that they hurt smaller companies that can't afford the cost of high-quality video delivery. (See Comcast's Cohen: Define Internet Fast Lanes.)

Transit providers aren't sitting out the fight either. These middle-mile network companies have repeatedly complained that ISPs aren't giving them a fair deal in peering agreements, and that service providers are even allowing specific peering points to degrade in order to draw the ire of consumers. The Federal Communications Commission (FCC) has agreed to look into the problem even though Chairman Tom Wheeler has made it clear he doesn't believe interconnection deals fall under the umbrella of net neutrality. (See Net Neutrality: Level 3 Sees Peering Progress Soon and Net Neutrality Redux? FCC Probes Peering Problems.)

Further complicating the issue is the fact that even when paid agreements have been struck directly between Netflix and ISPs, the quality of service doesn't necessarily improve right away. While Comcast Corp. (Nasdaq: CMCSA, CMCSK) subscribers have seen quality improvements since Netflix agreed to pay the service provider for a direct connection, Verizon Communications Inc. (NYSE: VZ) subscribers haven't been so lucky. This may be in part because it takes time to upgrade connections, and may also be in part because Netflix is still relying to some extent on transit partners (which are also fighting with ISPs) for delivery to Verizon customers.


For more of Light Reading's coverage of paid peering agreements and the net neutrality battles, check out our OTT video content channel.


According to a statement by AT&T Inc. (NYSE: T), the company reached its agreement with Netflix back in May and has been working to add interconnect capacity since that time. "We’re now beginning to turn up the connections," said a spokesperson, "a process that should be complete in the coming days."

— Mari Silbey, special to Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Michelle
50%
50%
Michelle,
User Rank: Light Sabre
7/31/2014 | 10:30:06 PM
Re: Pay To Play
I'm really not looking forward an outcome that includes consumers paying more...
MarkC73
50%
50%
MarkC73,
User Rank: Light Sabre
7/31/2014 | 10:53:03 AM
Verizon
I seriously doubt that time to upgrade has anything to do with a delay in Netflix-Verizon direct peering.  I speculate that its deal making gone awry.  The big loser in this is Cogent, more direct peerings means less need for its CDN for Netflix.
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
7/30/2014 | 5:27:48 PM
Pay To Play
This is indeed a complicated issue with good arguments on both sides about the equitable solutions. Somehow though it doesn't just seem that Netflix's actions are going to bode well for the others in the industry. As Netflix goes, so does the rest of the world? Where does the line end as costs rise, and consumers ultimately pay higher amounts to access internet services?
Featured Video
From The Founder
Light Reading founder Steve Saunders talks with VMware's Shekar Ayyar, who explains why cloud architectures are becoming more distributed, what that means for workloads, and why telcos can still be significant cloud services players.
Flash Poll
Upcoming Live Events
May 14-16, 2018, Austin Convention Center
May 14, 2018, Brazos Hall, Austin, Texas
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
I'm Back for the Future of Communications
Phil Harvey, US News Editor, 4/20/2018
BDAC Blowback – Ex-Chair Arrested
Mari Silbey, Senior Editor, Cable/Video, 4/17/2018
Verizon: Lack of Interoperability, Consistency Slows Automation
Carol Wilson, Editor-at-large, 4/18/2018
AT&T Exec Dishes That He's Not So Hot on Rival-Partner Comcast
Mari Silbey, Senior Editor, Cable/Video, 4/19/2018
Facebook Hearings Were the TIP of the Data Iceberg
Dan Jones, Mobile Editor, 4/20/2018
Animals with Phones
I Heard There Was a Dresscode... Click Here
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed