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c0lo writes:

"Many news outlets announced that Netflix agreed to pay Comcast for smoother network access.

The deal, which has been nearly a year in the making, would give Netflix direct access to Comcast's high-speed network, the two companies confirmed Sunday.

Under this new deal, Netflix will access Comcast's network directly or, almost directly, according to the Wall Street Journal, which first reported the news this afternoon. 'Under the deal, Netflix won't be able to place its servers inside Comcast's data centers, which Netflix had wanted,' the paper explains. 'Instead, Comcast will connect to Netflix's servers at data centers operated by other companies.'

The agreement is a surprise because Netflix could have used the issue as leverage while Comcast attempts to acquire Time Warner Cable Inc., an industry researcher said. 'I would have thought Netflix would have held out with the Time Warner Cable deal looming,' Craig Moffett, founder of research firm MoffettNathanson LLC, said in an interview. 'Netflix can ask for whatever it wants and has a reasonable shot at getting conditions put on the merger that could provide it with long-term benefit. On the other hand, that could be precisely what spurred this deal that Comcast was willing to settle with Netflix for a relatively low price to make the Netflix problem go away ahead of the regulatory review.'"