Netflix is hoping to improve relations with internet service providers with the announcement of its very own content delivery network, Open Connect. The new dedicated CDN aims to allow ISPs to partner up with Netflix in order to help manage the flow of data streaming to Netflix users, hopefully alleviating some of the cost as well as the burden that streaming Netflix content puts on an ISP’s network.

The new Open Connect initiative will run alongside the general third-party CDNs that Netflix has been using thus far, although Netflix expects that over the next few years all of its data will be served exclusively through Open Connect. Currently, however, only 5% of Netflix data is served by Open Connect, so the time at which all Netflix data is served only through Open Connect could vary depending on how quickly ISPs adopt the CDN.

Given that Netflix content accounts for as much as 30% of all data transferred on the internet, localizing the traffic should help ISPs mitigate the data traffic. Better, as long as they’re used within the Netflix terms of use, the appliances will be free to ISPs. More info for ISPs is available at http://openconnect.netflix.com/.

Netflix has tapped hardware developer Intequus to build the appliances that will link ISPs to Open Connect. The hardware design company will be providing appliances that contain more than 100 terabytes of storage, 10 gigabytes of network throughput, and a Quad Core Intel Sandy Bridge CPU that features low cooling requirements.

Alongside Open Connect, Netflix announced that it will also be sharing its hardware design and open source software components for its server. While Netflix anticipates that these new designs will be very cost efficient for ISPs, the Open Connect network could also create a better user experience for subscribers.