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Verizon CEO: We Will Get an ISP Deal With Netflix

5 Mar, 2014 By: Erik Gruenwedel

Lowell McAdam tells investor group he favors general set of regulatory rules covering both ISPs and streaming services

In the wake of Netflix’s groundbreaking ISP deal with Comcast, Verizon Communications expects to secure a similar agreement with the subscription streaming pioneer, CEO Lowell McAdam told an investor group.

Speaking March 4 at the Morgan Stanley Technology, Media & Telecom confab in San Francisco, McAdam said that government regulation cannot just apply to ISPs, whereby services using broadband expect to do so without paying for it.

In other words, McAdam views broadband as a toll road while Netflix eyes the channel as a freeway. The SVOD pioneer argues that consumers already pay ISPs for broadband access and it is merely delivering content to those consumers. Netflix agreed to pay Comcast — the nation's largest cable ISP — for direct broadband access to it subscribers in order to improve streaming speeds. It previously had contracted with third-party CDNs, which resulted in slower streaming speeds.

The CEO said he would favor a general set of rules that cover all the players, including SVOD services, Microsoft, Apple, Google, as well as multichannel video program distributors.

“You can't just regulate the carriers. They're not the only [ones] making sure the net is healthy,” McAdam said. “I have spoken live and via email with [Netflix CEO] Reed Hastings, and I believe that we will get some sort of an [ISP] arrangement with them as well.”

Separately, McAdam said Verizon is in discussions with studios and content holders regarding license rights for its OnCue streaming platform recently acquired from Intel. The over-the-top video platform would deliver video content to tablets, smartphones, PCs and connected TVs.

“Our goal is to work with the content providers. I have personally had discussions with the CEOs of the large content companies, and we would love to partner with them,” McAdam said.


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