Netflix is paying Comcast for direct connection to network

Ars writes Netflix is paying Comcast for direct connection to network

"A source close to Netflix told Ars that the company will not confirm whether there is any payment changing hands, but that a compromise was reached. Comcast and Netflix are interconnecting at Internet exchanges, the source said, suggesting a peering agreement."

""Under the deal, Netflix won't be able to place its servers inside Comcast's data centers, which Netflix had wanted," the Journal wrote. "Instead, Comcast will connect to Netflix's servers at data centers operated by other companies." The story noted that Netflix had been sending traffic primarily through Cogent, and then said that "Comcast presented Netflix with more attractive deal terms than the operator had been offering," suggesting that Comcast either bettered Cogent's pricing or lowered its previous demands."

Update: The Switch has a nice article explaining some of the technical issues for the layman, Comcast’s deal with Netflix makes network neutrality obsolete