Netflix And AT&T Sign Peering Agreement
[Philip Lelyveld comment; Is paying for a faster on-ramp a net neutrality issue?]
Interconnection agreements do not deal with how content moves across the network of an ISP, but instead focus on how it gets onto the network. In short, Netflix customers — who are also the customers of ISPs — request large quantities of data from the video-streaming company. Non-paid interconnect agreements see traffic traded between networks for no cost. ISPs are unhappy that Netflix sends so much data onto their networks, allowing the connection points between themselves and the video service to become clogged.
Netflix, therefore, pays the ISP for a direct connection to its network, ensuring that its content can find its way to its customers without delay.
See the full story here: http://techcrunch.com/2014/07/29/netflix-and-att-sign-peering-agreement/?ncid=tcdaily