updated 05:28 pm EST, Mon February 24, 2014
CEO calls deals necessary for survival of streaming services like Netflix
In an interview with CNBC, Verizon CEO Lowell McAdam noted that he was fairly certain that he would strike a similar deal as Comcast's with Netflix, making the streaming video purveyor pay for bandwidth, at least in part. McAdam called the Netflix deal with Comcast a "good thing," which allows for funding necessary infrastructure maintenance and build-outs.
"It's not a surprise that Netflix has been talking to everybody, and we've been talking to them for about a year," said the CEO, adding that "I'm not here to pre-announce and I'm not here to change my hand at the negotiating table, but I think there's a good opportunity here." Referring to the Netflix CEO Reed Hastings, McAdam said that "both Reed and I have talked about it, and we think it's in both of our interests."
Netflix struck the deal with Comcast to protect user speeds, which had been plummeting in recent months. Verizon is seeing the same drop, with Verizon being accused of blocking the streamer, and not upgrading necessary equipment to help Netflix's speeds.
McAdam stated that "if you see someone come in with a lot of load on the Internet, the video, you've got to get that in an efficient place. Making the connections far out in the network is a good thing and frankly paying for it, the commercial model, I think will work pretty well. To me that shows that you don't necessarily need a lot of regulation in a dynamic market here. By doing these commercial deals, we'll get good investments and good returns for both parties."