Effect of Consumers and Net Neutrality: Comcast-Netflix Deal

Netflix-Comcast deal has been applauded and criticized in equal measure since its coming into being in February this year. Under the deal, Comcast (an ISP) will connect directly to Netflix's (a content provider) servers, essentially eliminating content delivery networks that often act as middlemen, and consequently, ensuring that Netflix's traffic gets minimum disruption in the broadband network (Woollacott, 2014). So, what exactly does this mean for Comcast's consumers and consumers of other ISPs?

Effect on Comcast's Consumers: there has been concern that the quality of Netflix videos streaming on Comcast and Verizon networks has been increasingly poor over the recent past -- a trend that has been attributed to overloads on the two providers' interconnection points. The Netflix-Comcast deal essentially goes against this bottleneck -- with Netflix, which currently accounts for 30% of internet traffic, getting direct access to Comcast's broadband network at a fee. Comcast will have to guarantee a higher level of quality via its SLA; and consumers can, therefore, expect better-quality Netflix videos and less hiccups in transmission, owing to the effect of increased throughput (Reardon, 2014). The improved quality in transmission will nevertheless not be accompanied by price increases, because despite the fact that Netflix is paying for the direct broadband access, this is not a new cost -- it is essentially what the company would have otherwise paid to transit providers within the cycle (middlemen).

Consumers of Other ISPs: the deal is likely to set the stage for numerous other deals, and ultimately, consumers of other service providers such as Verizon, who have also raised quality concerns in the streaming Netflix videos, are also likely to enjoy the benefits of similar deals.

Effect of the Deal on Net Neutrality