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Netflix, AT&T Ink Interconnection Agreement

30 Jul, 2014 By: Erik Gruenwedel

Deal follows similar agreements between Netflix, Verizon and Comcast

In an effort to ensure smoother video streaming for its subscribers, Netflix has signed an interconnection agreement with AT&T — the third peering deal between the subscription streaming pioneer and major broadband provider.

Netflix and AT&T made no formal announcement of a deal, which took effect July 29 and was initially reported in the media citing anonymous sources. A representative from AT&T subsequently issued a statement to Mashable.com confirming the agreement.

"We reached an interconnect agreement with Netflix in May and since then have been working together to provision additional interconnect capacity to improve the viewing experience for our mutual subscribers,'' the spokeperson said. "We’re now beginning to turn up the connections, a process that should be complete in the coming days."

The deal undoubtedly ups Netflix CEO Reed Hastings’ displeasure with major ISPs, which he claims are assessing Netflix with an added tax to deliver their content the last mile to subscriber homes.

ISPs counter that Netflix represents the largest driver of streaming content during peak primetime hours, and as such should pay a fee to ensure its bits reach subscribers as smoothly as possible. Specifically, ISPs argue Netflix employs third-party connect delivery networks in an effort to lower delivery costs, which they say ends up slowing streaming bit rates.

Regardless, Netflix executives have gone on the offensive against the fees, with the SVOD leader earlier this year engaging in a war of words with Verizon. It has also lobbied the Federal Communications Commission to investigate the agreements, claiming they undermine the tenets of net neutrality, which aims to treat all Internet traffic the same.

The FCC is currently reviewing the interconnection deals as part of an ongoing effort to create new net neutrality guidelines after an appeals court struck down previous rules in January.



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