Much has been made about Netflix's degraded performance of late on Comcast and Verizon, but there's finally some resolution. Comcast has announced a "mutually beneficial interconnection agreement" with Netflix that would appear to put the troubles behind them. Comcast:
Working collaboratively over many months, the companies have established a more direct connection between Netflix and Comcast, similar to other networks, that’s already delivering an even better user experience to consumers, while also allowing for future growth in Netflix traffic. Netflix receives no preferential network treatment under the multi-year agreement, terms of which are not being disclosed.
Though the terms aren't being disclosed, it isn't hard to imagine that Netflix had to pay Comcast for the privilege of connecting to their customers unfettered. That would certainly make the "mutually beneficial" agreement beneficial for Comcast.
Netflix may not be getting preferential network treatment, but there's no question that Comcast customers Netflix have suffered a degradation in performance over the past few months. According to reports, the issue was peering: Comcast (and other ISPs including Verizon) weren't opening new network connections to Netflix, creating network congestion. This agreement presents relief for Comcast customers.
Will Netflix reach a similar agreement with Verizon? We'll see. But the precedent has been set, and apparently the arrangement is satisfactory enough for Netflix to have agreed to the terms "for years to come."
The idea of an ISP impeding one particular service's network traffic might stick in your throat. But make no mistake — Netflix produces a huge amount of traffic over the Internet. They're in an exceptional situation.
By some estimates, one third of traffic at peak hours is the result of Netflix-related streaming. The company continues to pile on millions of new customers from quarter to quarter as more and more people get comfortable streaming video over the Internet. Hopefully Netflix will do more to improve the efficiency of their streaming video technology, especially as customers expect ever-higher image quality (and Netflix itself has promised to start delivering 4K content this year, which will push bandwidth even further).
How's it likely to affect you? Well, if you're a Netflix customer on Comcast's network, you should see fewer buffering issues and connection errors to Netflix through your devices.
Over the long haul, we'll see whether you'll pay more for Netflix. Some of that will depend on how many more ISPs come to Comcast looking for money, and how many have the muscle to throttle the company's traffic in appreciable numbers.