Netflix has signed a deal with Comcast designed to increase the quality of its streaming process in an effort to get rid of glitches users have reported in recent months, which could raise prices for consumers.,
Netflix and Comcast didn’t disclose the amount Netflix agreed to pay for the agreement that will provide smoother programming to Comcast’s internet customers, but Michael Pachter, a Wedbush Securities analyst, told The Los Angeles Times that Comcast’s 33 million U.S. customers
will probably feel the impact.
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Comcast will "raise the price to whatever the market will bear," Pachter said. "This will ultimately compel Netflix to raise prices to consumers."
Netflix and other online streaming services have been battling with Internet providers over who's responsible for the costs of the online videos for consumers.
The agreement came just after Comcast reached a deal to acquire Time Warner Cable Inc.
That stretches the company’s broadband reach to 92 million Internet customers.
Companies like Netflix utilize broadband streaming provided by other companies to reach their customers. Netflix accounts for up to 30 percent of all Internet traffic at different points, The New York Times said.
The company had complained that internet quality to Comcast customers had dropped by 25 percent in recent months.
Tim Wu, a Columbia Law School advocate of net neutrality, the idea that level service should be provided to everyone, told the NYT that this Comcast-Netflix agreement probably heralds the arrival of more such agreements.
“This is the water in the basement for the Internet industry,” Wu said, referring to expectations there will be an upcoming flood of such deals. “I think it is going to be bad for consumers.”
Comcast offered assurances that the deal with Netflix will not give the company preferential treatment, the LA Times reported.
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