Verizon Communications CEO Lowell McAdam on Monday said he expects Netflix to start paying up in a deal that would ensure subscribers of the streaming service get the smoothest possible experience. This is exactly the same deal reached between Netflix and Comcast over the weekend, and could set off a huge precedent for other similar deals in the future. Broadband providers could essentially hold Netflix traffic “hostage” until the streaming service pays up for the increasing data loads.
Verizon Communications CEO Lowell McAdam told CNBC on Monday that he expects to reach an agreement with Netflix that would require the online video service to pay for bandwidth loads from streaming content. During an interview on “Squawk on the Street,” he said the companies have been talking for the past year. “I’m not here to pre-announce and I’m not here to change my hand at the negotiating table, but I think there’s a good opportunity here,” McAdam said. “Both [Netflix CEO] Reed [Hastings] and I have talked about it and we think it’s in both of our interests.” McAdam’s comments come a day after a rival in the cable industry, Comcast (the parent company of CNBC), announced an agreement with Netflix that would allow for faster video streaming speeds.