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Netflix Inks Time Warner Cable Pact to Pay for Direct Internet Connections

Netflix has agreed to pay Time Warner Cable for guaranteed bandwidth to deliver its streaming-video service to the cable operator’s broadband users, following similar deals with Comcast, AT&T and Verizon.

The No. 1 streaming service, which represents about one-third of all downstream Internet traffic in North America, now has deals with the country’s top four broadband providers, representing about 64% of all high-speed Internet subscribers in the U.S.

Time Warner Cable reached an agreement with Netflix in June, and we began the interconnection between our networks this month,” a rep for the cable company said. Netflix confirmed that it has a deal in place with TW Cable.

Comcast is in the process of acquiring Time Warner Cable, pending regulatory reviews.

Netflix execs have said they will “reluctantly” pay ISPs interconnection fees, with the goal of delivering better-quality video to their mutual customers. But CEO Reed Hastings has said such payments an arbitrary “toll” for gaining access to a provider’s customers and the company has lobbied the Federal Communications Commission to reclassify broadband as a telecommunications service, which would give the agency authority to impose new price controls and enact other regulations.

Comcast and Verizon have defended their paid-peering agreements with Netflix, saying they are a standard way the Internet bandwidth market works. The broadband operators argue that that Netflix is seeking to avoid paying its fair share of the cost of delivering Internet video, and that Netflix is free to procure additional bandwidth from third-party content-delivery networks.

News of Netflix’s deal with TW Cable was first reported by Gigaom.

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