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Netflix Agrees to Pay Verizon for Faster Network Access

Netflix Inc. (NFLX) agreed to pay for more direct access to Verizon Communications Inc. (VZ)’s FiOS broadband network to improve quality and reliability for its video-streaming customers, the second such deal in two months.

Netflix, the world’s largest subscription streaming service, will pay Verizon to guarantee faster access, according to statements yesterday from both companies. They declined to reveal any financial terms.

The video service is taking steps to make its programming as easy to access and watch as HBO. Netflix agreed in February to pay Comcast Corp. millions of dollars annually for improved access to its network. Last week, three small U.S. cable companies said they’ll put a Netflix channel on set-top boxes made by TiVo Inc.

Netflix Chief Executive Officer Reed Hastings has called the fee paid to Comcast an unfair toll on Internet companies that wish to use the Web to deliver video and other content to consumers on televisions, tablets and computers. He opposes the cable company’s proposed takeover of Time Warner Cable Inc.

Broadband providers say the fees are a regular part of business and should be levied against companies with higher levels of usage instead of more broadly to all Internet users.

Netflix, based in Los Gatos, California, fell 2.4 percent to $314.21 yesterday in New York. The stock has declined 15 percent this year. Verizon gained 1.4 percent to $46.60.

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net Rob Golum, Ben Livesey

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