Level3 today accused Comcast of demanding an additional fee from Level3 to transmit Internet online movies and other content to Comcast customers. According to a Level3 press release
, Comcast informed Level3 earlier this month that they'd be requiring the supposedly new recurring fee, which Level3 believes violates not only the FCC's policy statements on neutrality (which have shown to not be worth much on the enforcement front) and Comcast's previous proclaimed dedication to an open Internet. Says Level3:
On November 19, 2010, Comcast informed Level 3 that, for the first time, it will demand a recurring fee from Level 3 to transmit Internet online movies and other content to Comcast's customers who request such content. By taking this action, Comcast is effectively putting up a toll booth at the borders of its broadband Internet access network, enabling it to unilaterally decide how much to charge for content which competes with its own cable TV and Xfinity delivered content.
This action by Comcast threatens the open Internet and is a clear abuse of the dominant control that Comcast exerts in broadband access markets as the nation's largest cable provider. On November 22, after being informed by Comcast that its demand for payment was 'take it or leave it,' Level 3 agreed to the terms, under protest, in order to ensure customers did not experience any disruptions.
The release is skimpy on details, and it would be nice to see more specifics before dragging Comcast to the public square for flogging. Comcast has yet to comment about the allegations, and we've contacted them for a statement. Comcast's merger with NBC is up for review, so of course it's a good time to frame any and all anti-competitive behavior by Comcast as a network neutrality violation to maximize attention. Zoom also complained that Comcast was engaged in neutrality violations earlier today
said, on the surface this looks exactly
like the troll-under-the-bridge behavior AT&T dreamed of
when they began the modern neutrality debate in 2005, then-CEO Ed Whitacre proclaiming they were going to start charging other companies a "because we can" surcharge to connect to AT&T subscribers. Level3 did
Netflix's streaming business, so the timing is right if Comcast wants to violently leverage its massive subscriber base as a weapon against Internet video and truly open networks.Update
: Comcast has posted the following statement to their blog
Level 3 has inaccurately portrayed the commercial negotiations between it and Comcast. These discussions have nothing to do with Level 3's desire to distribute different types of network traffic.
Comcast has long established and mutually acceptable commercial arrangements with Level 3's Content Delivery Network (CDN) competitors in delivering the same types of traffic to our customers. Comcast offered Level 3 the same terms it offers to Level 3's CDN competitors for the same traffic. But Level 3 is trying to gain an unfair business advantage over its CDN competitors by claiming it's entitled to be treated differently and trying to force Comcast to give Level 3 unlimited and highly imbalanced traffic and shift all the cost onto Comcast and its customers.
To quantify this, what Level 3 wants is to pressure Comcast into accepting more than a twofold increase in the amount of traffic Level 3 delivers onto Comcast's network -- for free. In other words, Level 3 wants to compete with other CDNs, but pass all the costs of that business onto Comcast and Comcast's customers, instead of Level 3 and its customers.
Level 3's position is simply duplicitous. When another network provider tried to pass traffic onto Level 3 this way, Level 3 said this is not the way settlement-free peering works in the Internet world. When traffic is way out of balance, Level 3 said, it will insist on a commercially negotiated solution.
Now, Level 3 proposes to send traffic to Comcast at a 5:1 ratio over what Comcast sends to Level 3, so Comcast is proposing the same type of commercial solution endorsed by Level 3. Comcast is meeting with Level 3 later this week for that purpose. We are happy to maintain a balanced, no-cost traffic exchange with Level 3. However, when one provider exploits this type of relationship by pushing the burden of massive traffic growth onto the other provider and its customers, we believe this is not fair.
As we suggested was a possibility, Level3 appears engaged in a little showmanship. This is starting to look more like a peering dispute dressed up as a network neutrality violation to bring greater attention to the complaint. It worked, since Level3's initial chicken little press release was dressed up to read exactly like Ed Whitacre's 2005 dream scenario. Still, such peering disputes are usually between tier one providers, and Comcast still may be acting anti-competitively by demanding additional compensation for traffic delivery to their customers -- who already pay for service.