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Netflix and Comcast reach a long awaited deal

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After the struggle over broadband and the streaming video requirements this past two years Netflix will be paying Comcast for ‘direct access to Comcast’s broadband network’, which will provide much smoother service for those frustrated by Netflix’s recent slowdown, according to The Wall Street Journal breaking news report on Sunday.

The stats on how much global bandwidth that Netflix needs is an astounding one third of all traffic in North America in 2012. Now, with House of Cards appearing last week to 2% of the 33 million views that number is surely up.

Netflix and Comcast could not come to agreement in terms since Netflix wanted free access to Comcast network and Comcast wanted to be paid since the heavy traffic would consume more bandwidth. As negotiations dragged on Netflix Chief Executive Reed Hastings found in data reports that streaming speeds from Comcast customers had dropped 27% so he had to stop further fallout.

Finally a deal that pushed the envelope on net neutrality came to final agreement. According to the Wall Street Journal report breaking the news of the deal, Netflix will be paying Comcast for ‘direct access to Comcast’s broadband network’, which will provide much smoother service for those frustrated by Netflix’s recent slowdown. House of Card viewers can rejoice and return to binge watching the hit favorite.

Netflix CEO Reed Hastings and Comcast CEO Brian Roberts set up the framework of the deal at the CES 2014 show in Las Vegas. The final deal was struck over the past two days and is a so-called ‘paid peering’ deal, which connects Netflix's network to Comcast's directly. Netflix was previously using Internet middlemen, Cogent Communications, during the past year of off again and on again negotiations.

Calling it ‘a mutually beneficial’ agreement, Netflix and Comcast said the deal will provide Comcast broadband customers ‘a high-quality Netflix video experience for years to come.’

The situation of pushing net neutrality rules of equal treatment for equal data comes into question. Equal use proponents fear that cable and satellite companies will want to be paid for quicker streaming priority. Consumers fear higher fees if content providers use movies and TV shows made by its own subsidiaries or partner companies.

Passing on the cost to the customer from the Internet provider could just be higher fees.

Sandvine network technology company has studies that show Netflix takes up much of the Internet traffic with the evening’s time slots occupying about 32% of the downstream traffic provided to viewers in North America.

A warning tone was raised upon announcement of the deal.‘We now have an Internet service provider telling content providers that the only way its service can work is if you pay an extra fee,’ says Michael Weinberg, vice president of digital advocacy group Public Knowledge. ‘The Internet service provider is injecting itself into the relationship between Netflix and its customers.’

An educated guess to the Netflix and Comcast deal is that Netflix is installing its owner storage servers within the Internet service providers.

According to the WSJ report, Netflix has been working with Internet service providers (ISP) in a program called Open Connect in order to install its own storage servers within the ISPs' networks.

Netflix is not releasing details of its agreement with Comcast but an Open Connect technology method can be used for Netflix to directly connect to Comcast's network.

The WSJ report notes that Microsoft, Facebook and Google have started paying major broadband providers for direct connections to their networks that would provide faster and smoother access.

To read more on Netflix, net neutrality and 'House of Cards' view the list below in Author’s suggestions and watch the video atop this article on the leverage Netflix has from the success of House of Cards and its order for a third season.

Tweet me at Victoria Wagner@VictoriaRoss888

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