Netflix caves to Verizon, inks new content delivery pact

Netflix caves to Verizon, inks new content delivery pact

Netflix: FiOS users get better reception on DVD.
Netflix: FiOS users get better reception on DVD. (CC BY-NC-SA 2.0)

WASHINGTON, May 1, 2014 – Several sources confirm that Netflix (NFLX) has finally inked an agreement with telecom giant Verizon (VZ) allowing it to connect more directly and efficiently with the latter’s fiber-based FiOS broadband service.

Los Gatos, Calif.-based Netflix reportedly will jack up its prices by a buck or two for new customers to pay the Comcast and FiOS ransoms without hitting their own bottom line too badly.

As the Prudent Man—a long time FiOS customer—will readily attest, Netflix’ performance on the Verizon network has been considerably worse than lousy for at least six months now. Worse, after upgrading to a faster level of throughput on FiOS, network delivery of Netflix content got considerably worse rather than better.

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Most downloaded Netflix shows would reboot at least twice to rebuffer. In the process, the quality of the video output shifting down to the point where the picture began to pixelate worse than those pioneering but primitive Flash .gif videos that were once popular back in the Jurassic days of the Internet. And for this, we get to pay the big bucks?

In any event, as of last night, at least in the DC area, Netflix’ performance had not noticeably improved on FiOS, although, as with that company’s earlier agreement with Comcast, re-plumbing the system apparently takes at least a month or two, so service here should improve eventually.

The problem here is one of those intractable things that have made living in this country increasingly frustrating. Understandably, Verizon, Comcast (CMCSA) and other broadband suppliers have spent and continue to spend enormous amounts of money to handle increasing and often frivolous Internet and broadcast traffic. They have every right to be compensated for these expenses.

In the meantime, non-cable entertainment providers like Netflix have also spent a great deal of time and effort on computing and distribution power, not to mention the countless and likely painful contract obligations they continually incur in order to carry material from a variety of content providers.

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That said, it’s still hard for the average layman like the Prudent Man to understand why customers continue to get generally crappy service from all these providers even as the monthly cost of accessing a decent amount of content rises to the point where it begins to rival the monthly payments on a second mortgage.

Although they never fail to cry poverty, the one-percenters who own content services like Netflix and broadband pipes like Verizon and Comcast continue to make enormous salaries while their customers go into hock to pay for hundreds of extra stations that carry mediocre content no one wants, which is then transmitted with audio-video output quality that frequently is no better than what you could get from an old black and white Philco TV in the early 1950s.

For decades now, one clear solution is to end local political monopoly arrangements that enrich carriers who don’t have to compete while at the same time unbundling those ridiculous entertainment “packages” loaded with mediocre content that 90 percent of users neither want nor need.

Short term, we’ll be happy if we can get decent audio-video from Netflix via improved FiOS connectivity. But longer term, neither side in this racket has the moral high ground.

All this stuff costs too much. It’s never anywhere near as fast as purveyors claim it is, nor is the output quality any better than mediocre in many cases. It’s yet another example—as if you need any more—of how politicians and wealthy oligarchs are living like pashas by charging the average customer more and more money for an increasingly mediocre product.

At this point in broadband history, it might actually be a good idea to revert to an old 19th century custom. Families could toss out all their expensive audio-video components, buy a half-decent piano to occupy the freed-up space in the living room, and invite friends and family over once a week for a bottle of wine, a platter of nachos, and a good old-fashioned sing-along. In a year or three, those making the switch might just have saved enough money to pay off the mortgage.

As for those network and content oligarchs? Don’t worry about them. They’ll find someone else to rip off soon enough.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17