Level 3 Communications Complains about Comcast's excess charges for video content delivery:
Level 3 Communications Inc., a Broomfield, CO based Internet backbone company ("carriers carrier") complained Monday November 29th that Comcast Corp. is charging it an unfair fee for the right to send streaming video and other large data files to its subscribers. The company said it agreed to pay "under protest" to avoid service disruption.
Level 3, recently partnered with Netflix to deliver the latter's very popular video streaming service (on- line movies and archived TV shows) to broadband Internet subscribers. Level 3 helps Netflix improve online video delivery by navigating it over less congested Web routes. It said earlier this month it would need to boost its own network capacity due to its deal with Netflix, which accounts for about 20 percent of primetime U.S. Internet traffic (more than either You Tube or Hulu or other on-line video content provider).
Is this not Bit Torrent deja vu? The Level 3 complaint comes two years after the 2008 FCC decision for Comcast to stop slowing and blocking its subscribers from accessing an online file-sharing service called Peer-to-Peer from BitTorrent. That P2P service enabled broadband Internet subcribers to swap movies and other huge files over Comcast's Internet connection. A Federal Court subsequently overturned the FCC decision and questioned the FCC's authority to regulate Internet Service Providers and impose any net neutrality rules.
Here is Level 3's statement complaining about Comcast which is attributed to Thomas Stortz, Chief Legal Officer of Level 3 (not clear who it was intended for other than an open letter to the general public):
“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.
Level 3 operates one of several broadband backbone networks, which are part of the Internet and which independent providers of online content use to transmit movies, sports, games and other entertainment to consumers. When a Comcast customer requests such content, for example an online movie or game, Level 3 transmits the content to Comcast for delivery to consumers.
Level 3 believes Comcast’s current position violates the spirit and letter of the FCC’s proposed Internet Policy principles and other regulations and statutes, as well as Comcast’s previous public statements about favoring an open Internet.
While the network neutrality debate in Washington has focused on what actions a broadband access provider might take to filter, prioritize or manage content requested by its subscribers, Comcast’s decision goes well beyond this. With this action, Comcast is preventing competing content from ever being delivered to Comcast’s subscribers at all, unless Comcast’s unilaterally-determined toll is paid – even though Comcast’s subscribers requested the content. With this action, Comcast demonstrates the risk of a ‘closed’ Internet, where a retail broadband Internet access provider decides whether and how their subscribers interact with content.
It is our hope that Comcast’s senior management, for whom we have great respect, will closely consider their position on this issue and adopt an approach that will better serve Comcast and Comcast’s customers.
While Comcast’s position is regrettable, Level 3 remains open and willing to work through these issues with Comcast. However, Level 3 does not seek any ‘special deals’ or arrangements not generally available to other Internet backbone companies.
Given Comcast’s currently stated position, we are approaching regulators and policy makers and asking them to take quick action to ensure that a fair, open and innovative Internet does not become a closed network controlled by a few institutions with dominant market power that have the means, motive and opportunity to economically discriminate between favored and disfavored content.“
Opinions: John Ryan, a Level 3 legal official told Reuters the fee Comcast was asking was unprecedented. "Prior to Comcast's demand, no other broadband access provider had demanded a toll in order to increase interconnection capacity," Ryan said. One source in the content delivery network industry said it is unusual but "not unheard of" for a last mile provider to charge for connectivity."
Here is Comcast's Response to Level 3 Charges:
Comcast's statement, attributable to Joe Waz, Senior Vice President for External Affairs and Public Policy Counsel, Comcast Corporation:
“Level 3 has misportrayed the commercial negotiations between it and Comcast. This has 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 undercut 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.
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 on Comcast and Comcast’s customers, instead of Level 3 and its customers.
Level 3’s position is 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. To use Level3’s own words:
'To be lasting, business relationships should be mutually beneficial. In cases where the benefit we receive is in line with the benefit we deliver, we will exchange traffic on a settlement-free basis. Contrary to [other ISPs] public statements, reasonable, balanced, and mutually beneficial agreements for the exchange of traffic do not represent a threat to the Internet. They don’t represent a threat to anyone other than those trying to get a free ride on someone else’s network.’”
Who are the Regulators that can rule on this dispute?
With the FCC's rule of the Internet questioned by Federal Court, who can make a ruling on this case? The Justice Department?The Commerce Dept? Give me a break- they don't know anything about telecom If regulators sided with Level 3 in this case, it could potentially have ramifications for Comcast's proposed NBC Universal deal, which is being reviewed for anti-trust concerns. Comcast previously stated that it expects approval of the NBC Universal deal by year-end. That deal is being reviewed by the FCC, which declined comment on the statement from Level 3. If Comcast does acquire NBC Universal it will own a whole lot of video content. Do you think the company might charge more, block or slow down on-line content transmitted from competitive content delivery companies to protect its vested interests?
The FCC is scheduled to meet on December 21, with 'net neutrality' said to be at the top of its agenda. Why not meet on Christmas Day instead? The results would likely be the same- nada!