Danger of Netflix-Comcast deal

[Commentary] Netflix, the country's leading online video service, has agreed to directly pay Comcast, the country's largest provider of home Internet access, to deliver its streaming movies and TV shows. It seems unlikely that either company could be a real loser -- Netflix, concerned about the pauses and hiccups that streaming customers are getting, can rest easy that it's bought more reliability for its content delivery, and Comcast gets, well, money. The real losers, consumer advocates fear, may be the rest of us.

They're right to be afraid - although for a different reason than they might believe. The Netflix deal doesn't violate net neutrality principles. Netflix was already paying Internet middlemen to deliver its content to Comcast and other Internet service providers. These companies, like Limelight, Level 3 and EdgeCast, also deliver content to Internet service providers from other big content companies like Disney, Fox and others. But as Netflix has gotten bigger (traffic to Netflix drove one-third of peak Internet data usage in the U.S. in 2012), Internet congestion has slowed everything down for its subscribers. Now that Comcast has come through with the right price, Netflix may make similar deals with other providers. This may not be a bad thing - if the providers can supply Netflix with greater reliability at a decent price, the consumers may actually benefit in the short term. But in the long term, consumers will only suffer because of the growing market domination of Comcast.