Verizon's interconnection deal with Netflix pays off with No. 1 ISP ranking

Verizon (NYSE: VZ) FiOS has redeemed itself on Netflix's (NASDAQ: NFLX) ISP Speed Index, jumping from the No. 10 spot to the top spot with an average speed of 3.17 Mbps.

Netflix said that the telco's rapid rise, which started in September, came after the online video company signed an interconnection agreement with Verizon that unclogged ports for mutual customers. It added that similar agreements with Time Warner Cable (NYSE: TWC) and AT&T (NYSE: T) U-Verse drove up speeds in September to 2.87 Mbps and 2.77 Mbps, respectively.

In the August ranking, Verizon rose two spots on the video provider's Speed Index, to 2.41 Mbps, while AT&T, which also signed an interconnection agreement with Netflix in May, saw the largest gain. 

Source: Netflix

Other telcos such as Frontier and Windstream maintained their No. 11 and 12 spots on the index, while CenturyLink (NYSE: CTL) rose by 1 point on the index.

Cable providers also saw some interesting gains and losses on the speed index.

Bright House jumped 5 points to take the No. 4 spot with an average of 2.99 Mbps. However, cable peers Cablevision (NYSE: CVC), Cox and Comcast (NASDAQ: CMCSA) dropped one and two spots, respectively.

One of the interesting trends is that the U.S. continues to trail a number of key European countries and Canada in terms of average Internet speeds. Led by incumbent telco Bell Canada, the average speed is 3.3 Mbps. Meanwhile, six new countries that joined the index--France, Germany, Belgium, Switzerland, Austria and Luxembourg--averaged 3.12 Mbps.

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