Netflix nets streaming deal with Verizon

Netflix has reached a deal with Verizon to improve the speed and quality of its streaming content to subscribers.

This is the second deal in which Netflix pays an ISP to ensure that its movies and TV shows stream more quickly; the first, with Comcast, was announced two months ago.

Aware that its service creates heavy Internet traffic -- nearly one-third of downstream traffic in North America, according to tech company Sandvine -- Netflix has been making moves to improve connectivity. Through its Open Connect program it lets ISPs connect directly at Internet exchanges or even install its own servers within the ISPs' networks to improve customer streaming quality. But Comcast and Verizon are among the major ISPs that have not participated in the Open Connect program.

"We have reached an interconnect arrangement with Verizon that we hope will improve performance for our joint customers over the coming months," said Netflix spokesman Joris Evers.

Like the deal with Comcast, this one with Verizon gives the streaming provider a more direct connection between its servers and Verizon's network for improved delivery of content. While the deal caused an industry uproar, Netflix said it agreed to it reluctantly but felt it was needed to keep subscribers satisfied.

Netflix also struck out in disapproval of last week's announcement by the Federal Communications Commission that its new net neutrality, or Open Internet, rules would allow content providers to pay for Internet express lanes. "Where they are headed with this is down the wrong path, as ISPs get explicit legal permission to do deals with Internet companies," Evers says.