Netflix, after opposing Comcast's attempt to buy Time Warner Cable, is supporting a Charter/TWC merger because of a promise that the combined company will not charge large content providers and network operators for direct connections to its network.

Both Comcast and Time Warner Cable charge Netflix for network interconnection, also known as peering, which ensures that Netflix video doesn't hit congestion before entering the Internet service providers' networks. That's one of the main reasons Netflix opposed the Comcast/TWC merger, which was stopped by US regulators who said the deal could threaten online video providers that deliver content to the cable companies' customers.

But Charter today promised settlement-free (i.e. unpaid) connections to companies like Netflix. The company's filing with the Federal Communications Commission says the new policy has gone into effect and promises to maintain it until the end of 2018 if the merger is approved.

Netflix immediately pledged its support for the merger. "Charter's new peering policy is a welcome and significant departure from the efforts of some ISPs to collect access tolls on the Internet," Netflix said in a filing to the FCC. "Netflix believes that this new policy and the commitment to apply it across the 'New Charter' footprint is a substantial public interest benefit and will support scaling the Internet to meet consumers' growing demand for online services and help foster continued innovation across the Internet ecosystem. Accordingly, Netflix supports the proposed Charter-Time Warner Cable transaction if it incorporates the merger conditions proposed by Charter."

Comcast, AT&T, Verizon, and Time Warner Cable had insisted that Netflix pay for peering because its traffic wasn't "balanced," meaning Netflix sent far more traffic into the ISPs' networks than it received.

Charter's new policy makes it clear that "there is no requirement for balanced traffic," while the old policy simply wasn't as specific, a Charter spokesperson told Ars. Companies that qualify for free peering are "providing content to Charter customers," Charter noted in its FCC filing.

Still, companies have to meet certain requirements to qualify for the free network connections, and they'll have to pay for their own infrastructure.

For example, Netflix and others would have to interconnect with Charter at nine locations in California, Washington, Illinois, Virginia, Minnesota, Georgia, and Texas. They'll have to send at least 3Gbps of traffic (the 95th percentile) at each Charter location, measured on a monthly basis. While no money would change hands, Charter and the interconnecting company would each have to upgrade their own infrastructure when more capacity is needed.

Charter reserves the right to suspend interconnection agreements when there are large increases in traffic, but "will resume [peering] upon a reasonable showing that the Adverse Network Effect has been resolved."

Currently, Netflix does not have a peering agreement with Charter, instead delivering traffic through third-party transit providers. Netflix is "hopeful we can get one given their new peering policy," a Netflix spokesperson told Ars.

If the merger is approved, companies that pay TWC for connections will no longer have to, provided they meet the eligibility requirements, a Charter spokesperson told Ars.

"The thresholds established in the policy don’t discriminate by type of company," Charter told Ars. "If you meet them we will peer with you, and when we do, it will be settlement-free."

That means video companies like Netflix aren't the only ones who could get free peering. For example, content delivery networks that send traffic to ISPs on behalf of multiple Web services could qualify. While Netflix is so big that it built its own network, smaller video companies generally pay third parties to deliver their traffic to consumers.

Many Netflix customers received poor video quality for months until Netflix agreed to pay the biggest ISPs for interconnection last year. Much has changed since then, as the FCC's net neutrality order gives the commission power to judge interconnection disputes. The FCC doesn't strictly ban peering payments, but the threat of complaints helped network operators Level 3 and Cogent strike more favorable deals with ISPs.

AT&T, which is trying to buy DirecTV, has resisted Netflix's call for settlement-free peering.

COMPTEL, a tech industry trade group whose members include Netflix, Level 3, and Cogent, said today that the FCC should "ask AT&T why it isn’t willing to adopt the same policy [as Charter] with respect to its pending merger with DirecTV."