Netflix (NFLX) first made waves by agreeing to pay Comcast (CMCSA) to carry its traffic, then launched a public offensive last week in a bid to avoid future payments to Internet service providers that might see the video streaming giant as a tempting new source of revenue.
Verizon Communications (VZ) and Comcast have been the two huge ISPs playing hardball with Netflix so far, but there’s one broadband peddler unabashedly adored by Reed Hastings and company: Cablevision Systems (CVC). Last week the Netflix chief executive officer singled out Cablevision for kudos in his broadside about the perils of weak net neutrality rules in the U.S.
“Some major ISPs, like Cablevision, already practice strong net neutrality and for their broadband subscribers, the quality of Netflix and other streaming services is outstanding,” Hastings wrote. “But on other big ISPs, due to a lack of sufficient interconnectivity, Netflix performance has been constrained, subjecting consumers who pay a lot of money for high-speed Internet to high buffering rates, long wait times and poor video quality.”
Netflix and Cablevision brag that those problems aren’t an issue for 3 million customers around New York City, since the Long Island-based cable provider agreed last year to use Netflix’s content distribution network. Netflix has been trying to persuade ISPs to use the network, dubbed Open Connect, in which the company locates servers and other hardware and software inside facilities controlled by ISPs. That arrangement helps improve the speed and quality of Netflix’s video streams, which account for as much as one-third of all U.S. Internet traffic during peak evening viewing periods. Netflix says most of its international Internet partners have adopted the scheme.
In the U.S., however, many large players such as Verizon, Comcast, and Time Warner Cable (TWC) have opted not to use the Netflix network equipment. Netflix’s recent payment to Comcast has improved its service without using Open Connect technology.
Netflix says Cablevision offers the highest download speed in America and, by implication, the best viewing experience for the service. Other U.S. ISPs use the system, including Suddenlink Communications, but Cablevision is one of the few that has publicly announced its support.
Speedy Internet accolades are relatively new for Cablevision, which was embarrassed in March 2011 when the Federal Communications Commission released the results of its first study of broadband speeds. Cablevision ranked last of eight major U.S. ISPs, delivering only about 50 percent of its advertised download speed during peak traffic times. The company scrambled to upgrade its infrastructure, and seven months later the FCC touted the improvements in a blog post.