Netflix is starting to get pushed around by all of the Internet service providers in the United States, after signing a peering agreement with Verizon and Comcast, now AT&T has come to take a piece of the action.
Peering or interconnection agreements allow Netflix to receive direct connection to the ISP. This means they can avoid the various slumps in speed and throttling, in order to give customers an ideal experience.
Most of Netflix’s customers are still based in the United States, and they might see this as reason enough to pay the ISPs. Currently, Netflix is one of the only companies to actually go into peering agreements with these providers.
The amount of money spent on the deal is undisclosed and it appears neither party wants to reveal the amount. Negotiations were set up in May and have finally become public, much to the distaste of Netflix, who does not like these agreements.
In order to get their own back and cast an even worse image on the ISPs in the US, Netflix has begun telling users when their service provider is throttling their data and offers a speed index table on their website, YouTube has similar functionality.
The peering agreements are only available in the United States and a few other well monopolised countries. ISPs in the US offer no competition in price or performance, basically making it impossible for a customer to choose a better plan.
Google Fiber is changing this in some states in the US, but not quick enough. In Kansas City, Missouri, Austin, Texas and Provo, Utah, the ISP is rolling out their gigabyte per second Internet, ten times quicker than all others.
Comcast, AT&T, Time Warner Cable and Verizon all have their work cut out for them, if Google Fiber continues to expand. In the future, Google is looking at 18 more cities to expand into by 2018.