Netflix, AT&T hammer out interconnection deal to boost streaming video speeds

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After Netflix made direct interconnection deals with Comcast and Verizon to boost the quality of its videos earlier in 2014, it was pretty much inevitable the streaming service would also strike an agreement with AT&T. Recently, the inevitable was confirmed: Netflix and AT&T came to an interconnection deal in May.

However, the deal will only start to improve streaming speeds for AT&T subscribers this week.

"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 for our mutual subscribers," Netflix said in a statement to TechHive. "We’re now beginning to turn up the connections, a process that should be complete in the coming days."

With AT&T in the fold, Netflix now has interconnection deals with nearly all the largest Internet Service Providers in the U.S. Time Warner Cable, which is the country's second largest ISP, has not made a deal with Netflix—or it least it hasn't disclosed one. But with Comcast attempting to acquire its rival, striking a fourth deal may not make much sense at this time. Netflix declined to comment on whether it was in talks with Time Warner Cable.

Terms of the AT&T deal were not released; however, a Netflix spokesperson did confirm that this was a paid arrangement. In other words, Netflix is paying AT&T to improve the quality of Netflix traffic headed to AT&T subscribers' homes.

Netflix is not paying for AT&T to give Netflix traffic preferential treatment. Instead, Netflix servers will connect directly to AT&T's network, bypassing Internet backbone providers such as Level 3 that are paid to carry traffic for large companies. The end result should be faster Netflix streaming speeds for AT&T subscribers.

Before the two companies came to terms, AT&T took issue with Netflix CEO Reed Hastings in March after he said Netflix shouldn't have to pay interconnection fees.

"If there’s a cost of delivering Mr. Hastings's movies at the quality level he desires – and there is – then it should be borne by Netflix and recovered in the price of its service," AT&T's public policy chief Jim Cicconi said in a blog post.

Despite the back and forth, Netflix has maintained it shouldn't have to pay these interconnection deals. In April, Netflix said these types of arrangements amounted to double dipping on the part of the ISPs by charging both Netflix and ISP subscribers.

The AT&T-Netflix interconnection deal was first reported by Mashable.

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