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Netflix to pay Comcast for smooth video streaming

The deal could signal a green light for web companies to start paying internet providers for better service to their customers.

By Ananth Baliga

PHILADELPHIA, Feb. 24 (UPI) -- Video streaming business Netflix has agreed to pay Comcast to directly access their broadband servers, ensuring a smooth streaming of their TV shows and movies.

The deal, which comes ten days after Comcast's purchase of Time Warner Cable, could set a precedent for other web companies to pay internet providers for for smooth delivery of their content. The deal is also a sign of the dominance of Comcast, which after the deal with Times Warner makes it the largest U.S. broadband provider with 32 million customers.

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The terms of the deal were not disclosed but a Netflix statement did confirm that the agreement would provide "Comcast's U.S. broadband customers with a high-quality Netflix video experience for years to come."

Comcast has said the deal does not give Netflix preferential treatment and that it regularly charges other companies and third parties for routing traffic to its customers. Such interconnection deals are common among Internet service providers -- Comcast has a deal with Verizon Communications to route web traffic.

While Netflix has been in a standoff for connecting its servers free of charge to a provider's customers, it has had success with smaller providers like Cablevision Systems Corp. and overseas internet providers. But larger ISPs have stood by their demand that Netflix pick up the tab for this increased web traffic.

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[Comcast] [WSJ] [WaPo]

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