On the heels
of Comcast’s deal with Netflix to provide faster and more reliable Internet service, now comes word that AT&T and Verizon are also working on similar TV-video deals.
issued a statement that it was in talks with Netflix, while Verizon CEO Lowell McAdam said on CNBC on Monday that the two companies have been in negotiations for a year.
The effort by
Netflix is intended to bypass middleman companies that provide broadband connection and traffic with a direct connection with Comcast. For some time, Netflix consumers have been complaining about slow
connections in accessing Netflix content.
The costs will initially be minimal to Netflix, according to analysts -- around $25 million to $40 million a year. But the structure of the deal
could mean escalating fees to Comcast, which could grow to several hundred million dollars.
Analysts are worried that eventually Netflix consumers might be footing the bill for these
quicker speeds -- as well as to other TV-video content producers making similar deals.
Netflix has had a streaming service called Open Connect for TV providers’ direct access, but
AT&T, Verizon, Time Warner Cable, and others do not use it.