Good news today for all online video and gaming enthusiasts. The moment of streaming singularity is nearly upon us! Netflix, Inc. (NASDAQ:NFLX) announced on Monday that the average speed streaming speed for its customers increased from 2 Megabits per second to 3.1 Mbps between November 2013 and November 2014. This sign of the times reflects significant investments by telecoms in upgrading infrastructure over the last couple of years, as well as Netflix caving in last year and deciding to pay Internet providers to prioritize their traffic.
The firm reported that, on average, the 10 Internet largest providers are sending Netflix streams 51% faster now than in 2013. As Netflix explained in their statement, that means “better picture quality, quicker start times and fewer interruptions” for consumers.
At the end of last week, Bruce Greenwald, the founding director of the Heilbrunn Center for Graham and Dodd Investing at Columbia Business School, sat down for a Fireside Chat with Li Lu, the founder and chairman of Himalaya Capital as part of the 13th Columbia China Business Conference. The chat spanned many different topics, Read More
Netflix paid up for faster streaming speed
Of note, Netflix, Inc. (NASDAQ:NFLX) pointed out that streaming speeds increased at AT&T Inc. (NYSE:T), Comcast Corporation (NASDAQ:CMCSA), Time Warner Cable Inc (NYSE:TWC) and Verizon Communications Inc. (NYSE:VZ) this year “only after Netflix met their demand for interconnection payments.”
Until late 2013, Netflix had resisted paying Internet providers to improve bandwidth for their customers, saying it set a bad precedent in terms of net neutrality and the future of the Internet.
The argument over net neutrality
Netflix, Inc. (NASDAQ:NFLX) being forced to make payment to Internet providers to increase the streaming speed for its users is an excellent entree into the topic of “net neutrality.” In fact, this is really what the debate over net neutrality is all about: Does the government have a responsibility to regulate Internet providers to prevent them from charging for Internet fast lanes and creating a two (or more) tier system?
On one side of the debate, government regulators, content providers and consumer watchdog groups are working to preserve competition and maintain all websites equally accessible regardless of size. On the other side are Internet service providers who are looking to keep costs under control while still ramping up to meet Americans’ voracious and constantly growing demand for digital content