UPDATE: Comcast and Netflix on Sunday confirmed the deal.

With all the news lately that Netflix quality is degrading as a result of all the squabbling between ISPs and bandwidth providers over who has to pay for the traffic its users consume, there's a bit of a silver lining. Assuming that your household is "Comcastic," you might have already started to see a better experience with your Netflix viewing seemingly out of the blue.

According to unconfirmed reports, Netflix and Comcast have allegedly struck up some kind of a deal whereby Netflix traffic is being served by Comcast directly instead of being passed through an intermediary.

"Looked at the host serving my Netflix streams today and noticed something new," wrote App.net co-founder Bryan Berg in a blog post yesterday.

"No clue if money is changing hands or not, and the return path is what actually matters, but it appears that Comcast and Netflix have reached some sort of agreement regarding direct interconnection," he added.

Gigaom verified with industry sources that some kind of agreement between Comcast and Netflix was secured. However, the agreement's terms are still unknown at this time, aside from the fact that whatever the two companies have drummed up has been "a recent development."

Neither Comcast nor Netflix are offering up any statements about the alleged agreement, and it's unclear which side made the first move: Did Comcast reach out to Netflix in an effort to appear more benevolent as it works to close its merger with Time Warner Cable? Or did Netflix reach out to Comcast in an attempt to improve the quality of its users' experiences before issues of network neutrality make it even more expensive for the company to do so?

It's also possible that Comcast and Netflix struck a free deal. Otherwise known as a "peering agreement," the move would allow Comcast and Netflix to exchange data without slapping any additional fees or extra overhead to do so  Comcast customers get the data they're paying for sans annoying interruptions or degradation of quality (a feather in Comcast's cap), and Netflix gets the ability to serve up its data directly without paying an intermediary to do so on its behalf (which can introduce said quality concerns).

Nevertheless, the battle over who should pay for the massive amounts of bandwidth that Netflix users eat up is likely to wage on, even if two of the major participants seem to have called for the white flag.

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