The Wall Street Journal is reporting this morning that Netflix has caved to the Comcast behemoth and has agreed to pay a “protection fee” so Comcast customers can continue to stream Netflix.
Which means we’ll all wind up paying a lot more for Netflix… in addition, of course, to higher fees to Comcast because they have no real competition.
This is ALWAYS the result of big business monopolies.
Netflix Inc. has agreed to pay Comcast Corp. to ensure Netflix movies and TV shows stream smoothly to Comcast customers, a landmark agreement that could set a precedent for Netflix’s dealings with other broadband providers, people familiar with the situation said.
In exchange for payment, Netflix will get direct access to Comcast’s broadband network, the people said. The multiyear deal comes just 10 days after Comcast agreed to buy Time Warner Cable Inc., which if approved would establish Comcast as by far the dominant provider of broadband in the U.S., serving 30 million households.
For months Netflix and Comcast have been in a standoff over Netflix’s request that Comcast connect to Netflix’s video distribution network free of charge. But Comcast wanted to be paid for connecting to Netflix’s specialized servers due to the heavy load of traffic Netflix would send into the cable operator’s network. Under the deal, Netflix won’t be able to place its servers inside Comcast’s data centers, which Netflix had wanted. Instead, Comcast will connect to Netflix’s servers at data centers operated by other companies.