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Here are the basics: Netflix will pay Comcast an undisclosed sum, and in exchange Comcast will connect directly to Netflix's servers, improving streaming quality for all Netflix content.
In our guide to understanding the agreement, we noted that the deal wasn't really about net neutrality.
Apparently, Netflix CEO Reed Hastings doesn't agree with that assessment.
In a post on Netflix's blog, Hastings today argues that the "weak net neutrality" we have today isn't sufficient for protecting an open, competitive Internet. Here's Reed's argument for a "stronger" net neutrality:
"Strong net neutrality additionally prevents ISPs from charging a toll for interconnection to services like Netflix, YouTube, or Skype, or intermediaries such as Cogent, Akamai or Level 3, to deliver the services and data requested by ISP residential subscribers. Instead, they must provide sufficient access to their network without charge. "
Here, Hastings is a referring to the situation that led up to the Netflix-Comcast agreement. Comcast wouldn't hook up their data centers directly to Netflix, so Netflix had to pay an intermediary - Cogent - to connect to Comcast for them.
Cogent and Comcast had a deal where Comcast would accept traffic from Cogent for free, and Cogent would help Comcast customers get to other parts of the web faster for free. This is a standard industry practice, and went smoothly until Netflix traffic made the flow of bits between the two a bit too one-sided. That's when Comcast said Netflix (or Cogent, which could then charge more to Netflix) had to pay up.
Why does Hastings think that Netflix shouldn't have to pay?
"ISPs sometimes point to data showing that Netflix members account for about 30% of peak residential Internet traffic, so the ISPs want us to share in their costs. But they don't also offer for Netflix or similar services to share in the ISPs revenue, so cost-sharing makes no sense. When an ISP sells a consumer a 10 or 50 megabits-per-second Internet package, the consumer should get that rate, no matter where the data is coming from. "
The idea that cable companies should pay for infrastructure improvements themselves because their job is to simply offer a pipe for content is appealing, but Hastings' argument that cost-sharing isn't fair doesn't hold up to the simple fact that Netflix's streaming business wouldn't exist at all without the infrastructure provided by cable companies like Comcast.