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After Comcast deal, Netflix may need to renegotiate with Verizon and AT&T

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By Liana B. Baker and Lisa Richwine

(Reuters) – Netflix Inc, which agreed to pay Comcast Corp for faster video delivery, may have to make similar arrangements with other broadband providers to make sure its customers get trouble-free access its streaming movies and TV shows.

Verizon Communications’ chief executive said on Monday he expects Netflix will pay the telecom company for faster speeds after Netflix customers complained about slow connections to stream TV shows and movies with Verizon’s FiOS service.

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AT&T spokesman Mark Siegel said in a statement on Monday that “we’re in discussions with Netflix to establish a more direct connection between our networks, similar to agreements we have with others, so that AT&T broadband customers who use Netflix can enjoy an even better video experience.”

Talks with telecom companies that provide broadband Internet access gained momentum after Sunday, when Netflix agreed to pay Comcast Corp for faster speeds.

Evercore Partners analyst Alan Gould said the agreement with Comcast removed uncertainty and likely involved small payments since Netflix agreed voluntarily to the arrangement.

“This is probably a template for the deal that will get done with other broadband providers,” said Gould, who has an “equal weight” rating on Netflix shares. “We are assuming the payments are not going to materially change the business model.”

Netflix shares rose 3.4 percent to a record $447.

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Verizon CEO Lowell McAdam said on CNBC, where he discussed Verizon’s talks with Netflix, that the two companies have been in negotiations for a year.

These deals hinge on whether Netflix can set up direct access to Verizon, known as an “interconnect agreement,” rather than go through a third party. Verizon provides millions of U.S. customers with its FiOS broadband service and Netflix speeds have slowed on that network in recent months, leading to complaints.

Many providers including Cox, Cablevision and Google Fiber directly connect to the Netflix network through a service the streaming company developed called Open Connect. Those providers have not seen their speeds deteriorate in recent months.

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But others, including AT&T and Verizon, have opted not to use Open Connect.

Shares of Cogent Communications, one of the companies that took care of the Internet traffic exchange between the Comcast and Netflix networks, fell 7 percent on Monday as investors worried that these deals would take away Cogent’s business.

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Cogent’s chief executive Dave Schaeffer played down the effect of the Comcast-Netflix agreement on its business and reaffirmed the company’s annual revenue forecast.

“It doesn’t mean that revenue goes away from Cogent. It just means that some of the growth in revenue may not occur through us,” he said.

McAdam, the Verizon CEO, spoke out in favor of telecom companies signing deals with Netflix.

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“It shows you don’t necessarily need a lot of regulation in a dynamic market here. Doing these commercial deals will get good investment and good returns for both parties,” McAdam said.

Asked about discussions with Verizon or other providers, Netflix spokesman Joris Evers said “we talk to all major ISPs all the time to make sure Netflix users get the best possible experience.”

(This version of the story corrects the analyst rating on Netflix in paragraph 6.)

(Reporting by Liana B. Baker in New York, Lisa Richwine in Los Angeles and Diane Bartz in Washington; Editing by Sophie Hares and David Gregorio)

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[Image: “Teenagers enjoy movie night watching laptop” via Shutterstock]


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WATCH: Franklin Graham tells Jeanine Pirro coronavirus pandemic is because of people sinning

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Franklin Graham blamed sinners for the COVID-19 coronavirus epidemic during a Saturday night appearance on Fox News.

Host Jeanine Pirro noted the growing death toll and wondered how God could let that happen.

"Well, I don't think it's God's plan for this to happen," Graham said.

"It's because of the sin that's in the world, judge," he argued.

"Man has turned his back on God, we have sinned against him, and we need to ask for God's forgiveness and that's what Easter's all about," he continued.

"This pandemic, this is the result of a fallen world that has turned its back on God," he added.

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Drought causing water shortage amid coronavirus crisis in Chile

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With historically low river flows and reservoirs running dry due to drought, people in central Chile have found themselves particularly vulnerable to the coronavirus pandemic.

Years of resource exploitation and lax legislation have allowed most reservoirs in that part of the country to run dry.

"There are now 400,000 families, nearly 1.5 million people approximately, whose supply of 50 liters of water a day depends on tankers," Rodrigo Mundaca, spokesman for the Movement for the Defense of Water, the Earth and the Protection of the Environment, told AFP.

One of the main pieces of advice to protect people against coronavirus is to wash your hands regularly.

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Trump warns of ‘tough week’ ahead — after the United States surpassed 300,000 coronavirus victims

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US President Donald Trump warned Americans on Saturday to brace for a "very horrendous" number of coronavirus deaths in the coming days as the total number of global fatalities from the pandemic soared past 60,000.

As confirmed COVID-19 cases in the United States surpassed 300,000 with more than 8,300 deaths, there was some encouraging news in Italy and Spain.

Europe continues to bear the brunt of the epidemic, however, accounting for over 45,000 of the worldwide deaths, and Britain reported a new daily high in fatalities.

There are now more than 1.17 million confirmed coronavirus cases around the world and there have been 63,437 deaths since the virus emerged in China late last year.

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