Netflix has made it very clear that it doesn't think it should have to pay Internet service providers to get quality streaming service to an ISP's subscribers, going so far as to make a case for a new "strong net neutrality" that protects them (and presumably others) from such fees. Nevertheless, the company has made a deal with Verizon for better access.

Netflix confirmed to Reuters on Monday that it had reached a deal with Verizon Communications for faster delivery of its popular video streaming service — begrudgingly, no doubt. The terms of the deal were not disclosed; Netflix spokesman Joris Evers only said, "We have reached an interconnect arrangement with Verizon that we hope will improve performance for our joint customers over the coming months."

Sluggish Streaming and Direct Connections

This is definitely good news for Verizon internet subscribers as it was similarly good news earlier this year when Netflix struck a deal with Comcast for the same direct access to its network.

Both deals come after Netflix subscribers on both ISPs raised a stink over cripplingly slow or broken streaming on Verizon and Comcast around the Valentine's Day premier of "House of Cards." At the time, people were wondering about the January court strike-down of the U.S. Federal Communications Commission's ability to enforce its 2010 net neutrality-friendly Open Internet rules. But as we explained, the slow streaming was a result of indirect connections between Netflix's servers and the ISPs' networks — which isn't part of the traditional "last mile" purview of net neutrality.

Netflix's New Net Neutrality and Setting Precedents

After making the first deal for better access to Comcast's networks, Netflix CEO Reed Hastings wrote a lengthy blog post calling for a "stronger net neutrality" that wouldn't allow for ISPs to demand interconnect fees higher up in the Internet "pipeline" for better streaming service.

"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," Hastings wrote, essentially inventing a new version of net neutrality that would protect his business from such tolls. "Instead, they must provide sufficient access to their network without charge."

Hastings called the interconnect fees "arbitrary" and cautioned that if Netflix "which is pretty large" had to pay such fees, "imagine the plight of smaller services today and in the future."

In making yet another deal, this time with Verizon, Netflix is clearly setting a precedent for the future, whether it wants to or not. But the motivations behind the Verizon deal are clear: Netflix simply needs to get subscribers on the large Verizon network better service and is willing to pay for it right now. 

FCC, the Comcast/TWC Merger, Netflix and New Net Neutrality Rules

These generally technical deals between Netflix and ISPs are getting a lot more attention right now because the future of the Internet is particularly fragile and uncertain, now that the FCC has been tasked with revamping the Open Internet rules, while simultaneously Comcast is seeking to gobble up Time Warner Cable to become the biggest cable provider in America.

Netflix has come out against the Comcast merger and basically blamed the coming price increase for subscribers on Comcast's interconnect fees, which as we previously noted, is not exactly true. However, the question of Netflix's "strong net neutrality" is undoubtedly going to become part of the conversation as the FCC looks to reinstate its Open Internet rules in a new way — a proposal that has been recently leaked and doesn't look much like net neutrality anymore, garnering the disapproval of net neutrality advocates like the National Hispanic Media Coalition and others.

Ironically, Netflix faces a dilemma with the proposed new Open Internet rules though. While it's advocating for a stronger form of net neutrality, the part of the FCC's proposal that net neutrality advocates disapprove of would allow companies like Netflix to make deals with ISPs, not just for interconnection but for a "fast lane" directly to consumers. This could be something worth the price for a streaming service as popular as Netflix, as such a deal could guarantee the fastest possible connection for Netflix for every customer.

This is all up in the air though, as the FCC has yet to release its draft Open Internet rules. It's expected to release it to the public concurrent with a public FCC meeting in mid-May. The next couple of weeks, and months, will be pivotal in deciding the future of the Internet, for everyone, including Netflix.