The quality of Netflix streaming has tanked over the past several months at several ISPs because Netflix and the ISPs have been wrangling over who should pick up the tab for all the added traffic being generated by Netflix’s HD video streaming service. ISPs such as Verizon and Comcast have been asking Netflix and bandwidth providers such as Cogent Communications to pay additional fees that will help them deal with added traffic loads. Netflix, meanwhile, has asked ISPs to peer directly with its new video content delivery network as an alternative to charging additional fees.
GigaOM reports that it looks like Netflix and Comcast have come to some kind of peering arrangement because Netflix traffic seems to be flowing more smoothly over Comcast’s network than it has over the past several weeks.
“Bryan Berg, a co-founder of App.net, has posted Github a traceroute of traffic between Netflix and Comcast that appears to show the two companies have come to some sort of direct interconnection agreement,” GigaOM writes. “A source in the industry says that that interpretation is correct, but declined to comment further only saying that it was a recent development.”
The question now, as GigaOM notes, is which party caved? Has Netflix agreed to pay up to make sure its streaming quality remains high? Or has Comcast agreed to host Netflix’s CDN equipment in its data centers without asking for extra cash? This is particularly important because whatever agreement Netflix and Comcast may have struck will set the precedent for future peering disputes between ISPs and content providers.