1-Up on Wall Street: Does Netflix, Inc. Win or Lose With the Comcast Deal?

Critics and investors are up in arms over a deal in which Netflix (NASDAQ: NFLX  ) is paying for access to Comcast's (NASDAQ: CMCSA  ) Internet pipes. Is it a win or a loss for Netflix? What about the rest of the industry?

Host Ellen Bowman puts these questions to Fool analysts Nathan Alderman and Tim Beyers in this week's episode of "1-Up on Wall Street," The Motley Fool's Web show in which we talk about the big-money names behind your favorite movies, toys, video games, comics, and more.

Tim says Netflix probably welcomed the deal since it already pays to bring its Open Connect content delivery network, or CDN, to data centers around the globe to save on bandwidth and make it easier for networks such as Cablevision to get access to Netflix content.

Comcast hadn't participated in Open Connect. Now it doesn't matter, Tim says. Netflix gets direct access Comcast's network at various Internet peering points (think of them as on-ramps onto the digital highway system we call the Internet). Traffic should flow faster and more smoothly as a result.

Nathan says Comcast is exacting what amounts to a tribute for delivering streams at high speed over the last mile. And if such deals were to become commonplace? Comcast and its peers could end up establishing pricing tiers for Internet data service, effectively penalizing active users of streaming services. At that point, Nathan says regulators may be forced to step in.

Now it's your turn to weigh in using the comments box below. Where do you stand on the Netflix-Comcast deal? Please watch the video as Ellen puts Nathan and Tim on the spot, and be sure to check back here often for more "1-Up on Wall Street" segments.

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If the Concast-Netflix deal proves anything, it's that the cable industry as we've known it is going away. Do you know how to profit the shift? There's $2.2 trillion out there to be had, and three companies are poised to benefit most. Click here for their names. Hint: They're not Netflix, Google, and Apple.


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  • Report this Comment On March 02, 2014, at 11:08 PM, Fo45 wrote:

    Well, it make sense for ISPs to charge big data user like Netflix to upgrade their cable system so smaller businesses can conduct business too. I am under the impression that Netflix is threatening about regulators and net neutrality but forget that net can't be neutral while Netflix is using 30 % or more of it and slowing the traffic down for everyone else.

  • Report this Comment On March 04, 2014, at 5:41 PM, Fo45 wrote:

    I think regulators should look at net equality rather than neutrality.small guys internet is being slowed down because of netflix. The only way that can happen is by upgrade to fiberoptic the expense of which needs to be partly paid by Netflix who is using more of bandwith.

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