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Consumers’ troubles with online video may be subsiding — at least for Comcast customers. Comcast and Netflix appear to have resolved their differences over network peering, which has frustrated many Netflix users over the last few months with slow, intermittent service as a result of the dispute over the business of interconnecting networks.
Bryan Berg, a co-founder of App.net, posted a traceroute on Github Friday showing traffic data between Netflix and Comcast that appears to show the two companies have come to some sort of direct interconnection agreement (hat tip to Dan Gillmor who noticed the Berg post.). Multiple sources in the industry said that interpretation is correct, but declined to comment further. One source noted that it was a recent development. The two firms are peering in the Equinix San Jose data center, based on the traceroute.
The first question is if this is a paid peering agreement or a settlement-free agreement, where both sides agree to exchange traffic for free. Peering is an arrangement between two bandwidth providers — the companies that control the physical backbone of the internet — in which they send and receive traffic from each other for free. The logic is that the traffic sent from one network to another is reciprocated without adding extra costs and hurdles. This makes the web more efficient and redundant because companies don’t need to build out a network to connect every single service to every person who wants to consume that service.
But as a few dominant content providers have become the top sources of content on the internet, and the question of how online video will affect networks has grown more complicated, the conversations around peering became more about business as opposed to engineering. This has led to disputes and a poor quality broadband experience for consumers. Comcast customers have been loudly complaining that their Netflix streams were slow during prime time, for example.
Neither Netflix nor Comcast could be reached for comment about the deal.
This deal marks a detente of sorts in the peering and interconnection battles that Netflix has faced with at least one ISP.
There are two ways of interpreting this news. The first is that Netflix, worried about the threat of the FCC dismantling network neutrality and allowing ISPs to start charging content providers for delivering their traffic, decided to make a deal early when it could get lower prices. The second is the opposite; that Comcast, trying to appear benevolent as it seeks to create the largest broadband provider in the country via a merger with Time Warner Cable, peered with Netflix to avoid regulators asking tough questions.
Regulators should ask them anyway.
(This story was updated several times Friday afternoon as more information became available.)