This week’s deal between Netflix and Comcast is an historic, first-of-its-kind arrangement between an Internet content company and an Internet access company. Netflix will pay Comcast (an undisclosed amount) for smooth and stable video streaming to Comcast home subscribers. The announcement preempts the FCC’s ongoing attempt to regulate “net neutrality” — a theoretically level playing field for all Internet content companies delivering video or music over home Internet connections.
The second deal of its type will not be historic, but might be coming soon. This morning on finance channel CNBC, Verizon CEO Lowell McAdam explained that Netflix “has been talking to everyone,” and that McAdam “expects” Verizon to make a priority deal with Netflix similar to Comcast.
“It’s a good thing,” McAdam justified in the interview. In order to keep the Internet vibrant, we have to make the investments. And if you see someone come in with a lot of video load, you’ve got to get that in an efficient place.”
McAdam was not asked explicitly about net neutrality, but he clearly addressed its advocates when he said, “The commercial model will work pretty well. You don’t necessarily need a lot of regulation in a dynamic market. By doing these commercial deals we’ll get good investments and good returns for both parties.”