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Domestic ISP Speeds Jump After Netflix Pays

9 Sep, 2014 By: Erik Gruenwedel

Recent interconnection agreements between Netflix, AT&T, Time Warner Cable and Verizon saw the three ISPs climb the subscription streaming pioneer’s August ISP speed index.

A faster network streaming speed generally means a better picture quality, quicker start times and fewer interruptions.

AT&T U-Verse increased the most, increasing more than one Megabit per second (Mbps) to 2.61 from 1.44 in July, and rising seven spots in the U.S. speed index to No. 7. Verizon FiOS increased its streaming speed to 2.41 Mbps from 1.61, and Time Warner Cable upped its speed to 2.59 from 2.16, according to a Netflix blog post.

Meanwhile, Comcast, which was the first major ISP to ink a deal with Netflix, moved up one spot to 4th in the ranking. Its average Mbps increased to 2.90 from 2.82.

The increases pushed the U.S. average streaming speed to 2.57 in August, ranking it 11th among countries Netflix tracks on a monthly basis. Much like its record-breaking Sochi Olympic speed skating team, Holland continues to have the fastest ISPs, which average 3.63 Mbps. In fact, the Dutch’s slowest ISP — Tele2 — is 4.5% faster than the quickest in the U.S.: Cablevision — Optimum. 

The Netflix ISP Speed Index is based on data from the more than 50 million subscribers globally who stream more than 1 billion hours of TV shows and movies each month. The speeds reflect the average performance during primetime of all Netflix streams on each ISP's network and are an indicator of the performance typically experienced across all users on an ISP network.

Netflix said average ISP performance is often below advertised peak speeds due to myriad factors, including the variety of encodes Netflix uses to deliver TV shows and movies as well as the variety of devices members use and home network conditions. These factors can cancel out when comparing across ISPs.

Regardless, the uptick in streaming speeds is bound to further arguments that major ISPs have the power to control distribution of video data on the Internet through tiered pricing, and as a result, should be regulated. The Federal Communications Commission is currently scrutinizing Netflix's ISP deals, which the SVOD pioneer says amount to additional taxes.

FCC Chairman Tom Wheeler has suggested guidelines whereby ISPs could charge tiered prices to third parties so long as they were "commercially reasonable."

Netflix says such a scenario would hinder companies without the resources to pay for higher speeds.


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