updated 08:13 pm EDT, Tue July 29, 2014
Agreement dates back to May, but wasn't planned to be announced to the public
In the quest to give its users a better streaming experience, Netflix has reached an agreement with AT&T to gain a direct network connection. The two companies revealed that they entered into a peering deal after news broke from anonymous sources that the movie service reached another streaming arrangement. Previously, Netflix had worked out similar deals with Verizon and Comcast.
Mashable first reported on the deal earlier today, after two sources indicated that the agreement was happening. Financial figures were not revealed by the sources, as the deal wasn't expected to be publically announced. However, given that the details of the previous agreement weren't disclosed to the public, it comes as no surprise that AT&T and Netflix remain silent on the issue.
A spokeswoman for AT&T later confirmed the agreement with Mashable: "we reached an interconnect agreement with Netflix in May, and since then have been working together to provision additional interconnect capacity to improve the viewing experience for our mutual subscribers,'' said the spokeswoman. "We're now beginning to turn up the connections, a process that should be complete in the coming days."
In March, AT&T blasted Netflix after CEO Reed Hastings stated that Internet service providers needed to build more facilities to combat traffic issues, including those created by the video streaming site. AT&T's Senior Vice President of External and Legislative Affairs James Cicconi responded to Hastings assertion that the build should be done without charge to Netflix or customers.
"When Netflix delivered its movies by mail, the cost of delivery was included in the price their customer paid," said Cicconi. "It would've been neither right nor legal for Netflix to demand a customer's neighbors pay the cost of delivering his movie. Yet that's effectively what Mr. Hastings is demanding here, and in a rather self-righteous fashion."
Previous peering deals haven't seemed to pan out the way that Netflix intended. The agreement with Verizon seems like it has yet to yield any benefit to customers, according to the quality reports from the company. Netflix and Verizon have butted heads over the Internet congestion and messages indicating that the provider is at fault for the slowdown.
The Federal Communications Commission (FCC) has pledged to look into peering deals between providers like AT&T and Netflix. As part of the ongoing net neutrality debate, the FCC believes that the deals may not be in the best interest of consumers. The FCC is also looking into the congestion issues that have come up between the companies involved.