Why did Netflix decide to cave in and pay Comcast for a better direct connection to its network? Because apparently slow Netflix streaming on Comcast was costing the company customers. CNN reports that Netflix this week explained to the Federal Communications Commission that the quality of Netflix streams on Comcast had become so poor that the company had no choice but to pay up for a better connection.
“For many subscribers, the bit rate was so poor that Netflix’s streaming video service became unusable,” Netflix told the FCC. “Some of them canceled their Netflix subscription on the spot, citing the unacceptable quality of Netflix’s video streams and Netflix’s inability to do anything to change the situation… We had to do something to make the congestion stop.”
Comcast, of course, will scream bloody murder if you suggest that Netflix isn’t solely responsible for the poor streaming quality and will say that Netflix is sending an unprecedented amount of traffic onto Comcast’s network and thus should pay to upgrade Comcast’s connection ports.
Nonetheless, this explains why Netflix is so opposed to the Comcast-Time Warner Cable merger: It doesn’t want Comcast to have even more leverage when it comes to extracting peering fees, which is something it will definitely have if it gets even bigger thanks to its acquisition of TWC.
