Netflix's Open Connect is a touchy issue for big cable

Netflix's Open Connect is a touchy issue for big cable
Netflix -- home of "Orange Is the New Black" -- has connection issues with some cable companies. (Netflix)

There has been a lot of speculation lately that Netflix may soon reach agreements with some big cable operators that will make it easier for consumers to access the streaming service for movies and television shows.

But don't get rid of your tablet or Roku, or put off plans for an Internet-enabled television, just yet.

There is still a big sticking point dividing Netflix and some of the nation's biggest pay-TV distributors, including Comcast and Time Warner Cable, that may slow any movement to make access to Netflix available via the set-top box.

At issue is Open Connect, a content delivery system Netflix wants broadband providers such as Comcast to use. The catch is that Netflix wants Open Connect to be installed inside the broadband provider's own networks.

Some distributors, incuding Cablevision in New York, have already said yes to Open Connect, which is offered by Netflix free of charge. However, there are costs to the broadband provider to accommodate the service, and that is a major concern.

But Comcast and Time Warner Cable aren't ready to let Netflix into their kitchen. One executive said there is concern that Open Connect is a "Trojan horse" of sorts and that once Netflix is inside it will then start making more demands.

Open Connect can be used via a common Internet exchange but it is not clear if that eases the concerns of the cable companies.

Also, if Netflix gets what the cable companies consider to be special treatment, then what is to stop other companies that generate big traffic from demanding the same?

Netflix insiders laugh off the Trojan horse concerns, arguing that Open Connect is only about making the transmission of Netflix smoother and delivering better quality to subscribers.

There is one thing both sides agree on: This one won't be resolved anytime soon.

For the record: An earlier version of this post didn't note that Open Connect can also be used via a common Internet exchange.


Follow Joe Flint on Twitter @JBFlint.