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The Non-Techie’s Guide To The Netflix/Comcast Deal

By 02.24.14

netflix cash

As we all know, because the Internet lit up with rage about it last night, Netflix has decided to pay Comcast to connect directly to their servers. So what does this mean for you? Here’s what you need to know.

So, is this a violation of net neutrality?

Not as such, although there are problems with it that we’ll get to. Essentially, Netflix used to pay an intermediary to connect their traffic to Comcast’s servers. Now, they’re paying Comcast instead.

Oh. So basically they cut out the middleman?

No, essentially, they’ve made your cable provider the middleman between you and the service you pay for. Consider that Netflix has accused Comcast and Verizon of deliberately throttling their streaming traffic, which is problematic not least because both of those companies own Netflix competitors, Xfinity Streampix and Redbox Instant respectively.

It’s not unreasonable to view this as Netflix essentially capitulating to arm-twisting it shouldn’t have been subjected to in the first place; after all, if you pay Comcast to stream Netflix, the understanding is Comcast lets you stream your goddamn Netflix.

Oh. OK, that does sound pretty bad.

It’s arguably worse, in the abstract. It means that there’s a precedent being established wherein owners of networks can both charge users for access to the network and web services for access to their users. Nobody really knows how, exactly, this might change the Internet and how we use it, but not unreasonably, it’s viewed with some trepidation.

Will Netflix pay other ISPs for a direct connection?

Good question. Netflix and Verizon have been locked in a dispute for months over Verizon’s supposedly high-speed FiOS network somehow, magically, not being able to handle streaming video from Netflix’s servers, something Verizon has more or less admitted is entirely deliberate.

That said, Comcast has leverage other ISPs don’t, being the biggest one in the country and the one with the most markets, and potentially more if their joke of a merger with Time Warner Cable is actually allowed to happen. It seems unlikely Netflix didn’t cut this deal to put pressure on Verizon; if your neighbor can stream Netflix perfectly over his cable Internet and your House of Cards connection is freezing on a much faster pipe, who gets the angry phone call? Not helping Verizon is the fact that they’ve essentially stopped building their FiOS network; if they start losing customers, it’s going to hurt them a lot more than it’ll hurt Netflix.

There will undeniably be a few hands put out over the coming months, probably from the likes of Cablevision and AT&T. But whether they get money, or just spit in their palms, will likely depend heavily on how many Netflix subscribers they already have in their network.

Will this drive up the cost of my Netflix?

Possibly, but honestly it doesn’t seem likely. Keep in mind that budgetarily, this is just Netflix shifting a line item from one middleman to another. Netflix now also has motivation to test a variety of plans at different prices, so if you’re a light user, you might actually be able to save money. Either way, though, keep an eye out in the coming months.


TOPICS#NETFLIX
TAGSCOMCASTdealsexplainers

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