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Sources: Netflix and Comcast have reached a peering agreement

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.

Github Comcast Netflix peering agreement traceroute

(This story was updated several times Friday afternoon as more information became available.)

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20 Responses to “Sources: Netflix and Comcast have reached a peering agreement”

  1. Michael Elling

    When will people wake up to the fact that this is a repeat of 1913 all over again? The last mile access providers (IAPs, not ISPs) are deathly afraid of intelligence and content pushed closer to the edge. Best to control it with fewer interconnection points and lessen the possibility of bypass in the last mile by controlling the mid-mile. That’s why AT&T agreed to interconnect but had a 50 mile exclusion zone; just far enough to make wireless bypass at scale in the mid-mile or WAN impossible for the forseeable future. In fact it wasn’t until the 1950s that it became even remotely possible with changed regulations and so MCI was born in 1963; even though it was both commercially and technically feasible given the right interconnect policies for it to have happened in the 1920s. Competitive and app providers better wake up to this collectively before it is too late as we work through NN, IP transition, and USF issues under the new FCC regime. Right now, in the words of Werner Herzog, it’s everyone for themselves and monopoly (G-d) against all.

  2. Paul Banta

    This is good news for someone that had to cut back on his cable service because of the crazy utility bills this winter. I’m down to Internet (with the “Blast” option) and the basic local OTA channels an HDTV can get w/o a separate cable box (we still get one free–good for a VCR in a “pinch”). We haven’t heard of a “cap” on our internet service yet (in Pennsylvania). We use Hulu+ and Netflix on PC’s PS3, and Roku. So far so good…crossing fingers…the BAD news is if there are going to be cap fees, etc, have to find a way to manually throttle back the players (I don’t need everything to be in “Super HD”). There are controls on the PC players to do this, but afik not on the PS3 or Roku (which are the throughputs for our tv’s). That could be a problem if ti comes up…

  3. Roger Andreas

    Nice that Verizon and Comcast are willing to f#@$ over their own customers to get a business deal ironed out. Been fighting Netflix slowness on Comcast all week. For what Comcast charges, there should be NO intentional slowdowns ever. Cannot tell you how completely irritated I am about this.

  4. David Woodman

    Depend on the scope of “last-mile”, Comcast and the like should not allow the traffic to go through their respective backbone. Instead, Cogent, contracted by NETFLIX, should route the traffic directly to the last-mile peering points (possibly hundreds, if not thousands, of peering points).

    Please try to traceroute the domain name of Netflix’s service URL so to show the path to the actual server(s) sending the streams.

    If Comcast was serious in Open Connect, there should have been far less hop counts.

    BTW, “te” stands for Traffic Engineering or 10G Ethernet? You may also want to check the name convention Comcast uses for its infrastructure. Here is my interpretation:

    ur == user router
    ar == aggregation router
    cr == core router
    pe == peering edge

      • George Ou

        Paid peering is more effective than last-mile prioritization. That’s why nobody buys last-mile prioritization. Everything we are talking about here is all about paid peering. You’re insinuating that Comcast is worried that FCC Net Neutrality would disallows paid peering so they reached a settlement with Netflix. The facts don’t support your assertion.

  5. nslookup of 198.45.63.164 gives ipv4_1.lagg0.c070.sjc002.ix.nflxvideo.net
    But netflix.com and movies.netflix.com point to completely different addresses from AWS. So how to I determine where the stream is actually coming from?

  6. It’s completely in Comcast’s interest to play nice until the merger is approved. It might make the FCC terms less onerous. I’m sure once the deal is approved, Netflix traffic will tank again. Comcast might even pay Verizon to get them to stop making ISPs look bad during the merger negotiation.