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Netflix is going to keep striking deals with the devil

Zachary M. Seward
By Zachary M. Seward

Chief executive officer

Netflix has agreed to pay for better access to Verizon’s customers in a deal similar to one it struck with Comcast earlier this year.

Both companies confirmed they have reached a deal but wouldn’t provide details. Two sources said Netflix will pay to connect directly with Verizon’s network, bypassing clogged pipes on the rest of the internet. (We explained how that works in this piece.)

The immediate result should be improved Netflix download speeds for more than 6 million people who subscribe to Verizon’s fiber internet service, known as FiOS. You can see how Netflix speeds have suffered in recent months on Verizon’s networks—and how a similar situation with Comcast was resolved after Netflix agreed to pay:

That leaves AT&T, which is also in a dispute with Netflix over the quality of their connection. Netflix explicitly called out AT&T (pdf) for the slowdown last week, a sign that the two companies aren’t close to an agreement.

Netflix portrayed its agreement with Comcast as a deal with the devil—that it would keep making. ”While in the short term Netflix will in cases reluctantly pay large ISPs to ensure a high quality member experience, we will continue to fight for the Internet the world needs and deserves,” Netflix CEO Reed Hastings wrote.

The company has lobbied the US Federal Communications Commission (FCC) to prohibit such “paid peering” arrangements as part of its revised net neutrality rules. The FCC recently signaled that isn’t likely to happen.

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