Netflix, Time Warner Cable reach deal on streaming quality

Netflix, TWC reach interconnection agreement

Netflix Inc. has signed a deal with Time Warner Cable that should bring more consistent, high-quality streams of movies and TV shows to the cable company's Internet subscribers.

“Time Warner Cable reached an agreement with Netflix in June and we began the interconnection between our networks this month," the dominant cable provider in Los Angeles said in a statement.

Though its reached similar agreements with Comcast, Verizon and AT&T, Netflix has criticized the interconnection agreements as an arbitrary tax on major websites.

The FCC is investigating the deals, which lead to a direct connection between the servers of Internet service providers and companies such as Netflix. But many analysts say the deals don't violate the principle of net neutrality -- the idea that there should be no fast lanes or slow lanes on the Internet.

Instead, they argue that the deals simply replace agreements that midstream companies signed with Internet service providers on behalf of Netflix. And only a few companies that generate large amounts of Internet traffic need to go around the midstream companies by that argument.

Netflix has more than 50 million subscribers worldwide, and they view more than 1 billion hours of video each month.

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