Last week Level3 ignited somewhat of an Internet firestorm by proclaiming that Comcast was violating net neutrality by demanding they pay a new connection fee
to deliver Internet video services to Comcast customers. Comcast quickly responded, insisting that this was just another balanced exchange peering dispute
, the likes of which we've seen tier 1 backbone providers (most frequently Cogent
) engaged in over the years. With the PR pendulum swinging in Comcast's direction, Level3 last week penned a lengthy missive
again insisting this was no normal peering dispute, but anti-competitive behavior directly meant to cash in on Level 3's new Netflix CDN responsibilities.
Level3 continued to make their case this week, president and COO Jeff Storey speaking at the UBS Global Media & Communications conference this morning. Storey continues to insist this has absolutely nothing to do with peering
, and absolutely everything to do with erecting a new toll on the last mile:
Storey said the crux of the dispute was that Comcast now wants to charge for access at the local network level. "If I were handing off traffic to Comcast in New York and expecting them to deliver it in San Diego, I would expect to pay for that," Storey said. "But that's not what we're doing. We spent billions of dollars to get into this business and expect to use that infrastructure in an efficient way."
Storey seems to run over and around the fact that Level 3 decided to pay (though they won't say how much) instead of fighting Comcast. Over at the Comcast blog, Comcast continues to insist this is an ordinary peering dispute
, while analysts like Frost & Sullivan's Dan Rayburn continue to insist
this is anti-competitive behavior dressed up
as a peering dispute:
Comcast already gets paid by customers for use of their last mile network now also wants Level 3 to also pay for traffic requested by Comcast’s customers for the same content. Comcast is trying to get paid twice for the same capacity. Comcast wants people to believe that they have to bear all the cost for the growth in traffic, which comes from video, yet Level 3 is spending tens of millions to support that demand as well. Comcast is acting as if they can’t handle the traffic or costs associated with it, yet Comcast has had 250GB caps for a long time.
It has been interesting to watch the PR pendulum swing on this issue, as even people familiar with complex network technology issues try to decipher the debate without being privy to confidential agreement details. About the only thing we've been able to conclude after a week of watching these two companies duke it out in the mainstream press is that being a self-professed "expert on peering arrangements" doesn't appear to mean all that much.