Services & Software

Netflix signs streaming traffic deal with Verizon

Just months after signing a similar deal with Comcast, Netflix has reached an agreement to provide a direct connection from the video service to broadband customers.


Netflix and Verizon Communications have reached an agreement to provide a direct connection from the video service to broadband customers, the video-streaming service confirmed Monday.

"We have reached an interconnect arrangement with Verizon that we hope will improve performance for our joint customers over the coming months," Netflix said in a statement. CNET has contacted Verizon for comment and will update this report when we learn more.

Financial terms were not revealed, but the deal is likely similar to a "paid peering" deal Netflix struck with Comcast in February in which Internet service providers would connect directly to Netflix's content delivery network to deliver better quality video to home broadband users who are subscribed to the Netflix service.

Like Verizon, AT&T has previously acknowledged that it too has been in talks with Netflix over a similar deal. Netflix wouldn't comment directly on the negotiations with these companies, but it has previously acknowledged that it's been in contact with all major Internet provider players regarding its Open Connect content delivery network.

Netflix's deal with Comcast came after a long dispute over whether Netflix would pay Comcast for connecting directly to its broadband network. In recent months, the dispute appeared to be heating up, with suggestions that Comcast customers were seeing their connections to Netflix degraded. Netflix released data in February that showed the average Netflix streaming speed declined 27 percent since October.

The Verizon deal comes just days after details of the Federal Communications Commission's proposed plan for an open Internet leaked out, eliciting wide-ranging critical reaction from consumer advocacy groups worried that they may endanger Net neutrality. Observers also worry that such agreements with ISPs may deal a setback to Net neutrality, which aims to prevent broadband providers from blocking access or discriminating against Internet traffic traveling over their connections.

Netflix shares fell $7.87 on Monday to $314.21, a decline of 2.44 percent. In after-hours trading, the stock was down an additional 21 cents to $314.