Netflix (NFLX) Signs Paid Peering Deal With Time Warner (TWC)

Time Warner Cable (TWC) has confirmed to Gigaom that it has signed a direct interconnection deal with Netflix, Inc (NFLX), making it the fourth U.S. ISP after Comcast (CMCSA), Verizon (VZ) and AT&T (T) to gain interconnection payments from the online video-streaming service provider.

Time Warner told Gigaom that the deal, which like the others aims is to improve the viewing experience of Time Warner’s broadband customers who are also Netflix subscribers by providing faster streaming and better-quality video, was reached in June and implemented this month. Netflix CEO Reed Hastings however, remains philosophically opposed to such deals even as he signs them due to their implications on net neutrality.

“Some big ISPs are extracting a toll because they can – they effectively control access to millions of consumers and are willing to sacrifice the interests of their own customers to press Netflix and others to pay,” Hastings wrote back in March.

According to Arstechnica’s Jon Brodkin, this may be Netflix’s last deal in the U.S.

“Just a handful of U.S. ISPs have required these access tolls, with Time Warner being the last of the four,” a Netflix spokesperson told the publication.

Netflix shares are down $1.95 to $466.20 in pre-market hours after closing at $468.15 in regular trading on Tuesday. Through Tuesday’s close, NFLX was up 27.16% on the year. Shares of Time Warner are up fractionally pre-market to $77.03. They had closed at $76.99 in the regular session.

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