AT&T Gets Netflix to Pay for Content Delivery

Netflix will pay AT&T for better streaming speeds, media outlets are reporting.

The news comes after Netflix made similar deals with Comcast and Verizon. According to Business Insider, Netflix has made an interconnection pact with AT&T, agreeing to absorb the costs of delivering its content (“House of Cards,” anyone?) to AT&T subscribers.

The move deals another blow to Net neutrality proponents who insist that companies paying for the so-called “toll road” will pass the costs on to end users, and ultimately create discriminatory access to the Internet and its applications. That’s despite Netflix’s assertions that it shouldn’t have to pay Internet providers for quality improvements.

But Netflix says its Comcast customers are experiencing faster speeds and that AT&T users soon will see improved connections, too.

“We reached an interconnect agreement with AT&T in May and since then have been working together to provision additional interconnect capacity to improve the viewing experience of our mutual subscribers,” a Netflix spokesperson told Business Insider this week. “We’re now beginning to turn up the connections, a process that should be complete in the coming days.”

Ed Whitacre, AT&T’s longest-serving CEO who retired in 2007, would be proud. He’s the one who helped spark the Net neutrality debate back in November 2005 in an interview with Business Week.

“Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it,” he told the magazine. “So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes? … For a Google or Yahoo! or Vonage or anybody to expect to use these pipes free is nuts.”

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