Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

Summary: On the surface, this Comcast-Level 3 dispute - which is quickly being moved into the court of public opinion - appears to be a slap-in-the-face challenge to Net Neutrality, the movement to ensure a free and open Internet.After all, to hear Level 3 tell the story, big bad Comcast is suddenly shaking down the content delivery network for a recurring fee at the "toll booth at the borders of its broadband Internet access network.

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TOPICS: Browser
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On the surface, this Comcast-Level 3 dispute - which is quickly being moved into the court of public opinion - appears to be a slap-in-the-face challenge to Net Neutrality, the movement to ensure a free and open Internet.

After all, to hear Level 3 tell the story, big bad Comcast is suddenly shaking down the content delivery network for a recurring fee at the "toll booth at the borders of its broadband Internet access network." It makes a big accusation that Comcast is unfairly charging companies that deliver content that competes with its own. And it paints itself as a noble victim: a company that "agreed to the terms, under protest, in order to ensure customers did not experience any disruptions."

Granted, Level 3 raises some valid concerns. By waving the red flag of blatant Internet discrimination - whether real or perceived - the company is forcing the FCC to once and for all deal with the issue of Net Neutrality, as President Obama promised during his campaign. Already, a grassroots movement calling on the FCC to "Stop Comcast from blocking Netflix" is working its way through Twitter and Facebook, calling on fired-up consumers to sign petitions and be heard by Comcast and the FCC.

But is this really a Net Neutrality issue? Comcast, which is fighting back in the court of public opinion, says it's not. (I would have expected no less.) And to make its point, Comcast is launching what appears to be an educational campaign of sorts to explain these technical business relationships to the jury of the court - consumers.

The disagreement between Comcast and Level 3 has nothing at all to do with the type of content being moved over the broadband networks, Comcast spokeswoman Sena Fitzmaurice told me earlier today. This is strictly a traffic issue and it started when Level 3 came to Comcast to request more capacity beyond what was already being offered as part of a no-cost "peering" agreement.

A peering agreement, simply put, means that two companies transfer more or less equal amounts of data back and forth over their networks without charging each other. The agreements sometimes allow as much as a 2:1 ratio of traffic to move without any additional charges. But when Level 3 came to Comcast and asked for a 5:1 ratio on that traffic-exchange relationship, the broadband provider came back with a fee that's comparable to what Level 3's competitors are being charged by Comcast.

And that brings us to where we are today, with the companies launching dueling press releases and blog posts, grassroots movements and consumer rights groups like Free Press calling on the FCC to "keep Comcast in check" and the FCC quickly responding to those cries by saying that they're "looking into it," as reported by the Wall Street Journal

But Comcast is fighting back. This morning, the company posted7-minute video to explain how these peering relationships work, using illustrations and language that easily understood by non-technical people. This afternoon, it put a Top 10 list on its blog, pointing out, among other things, that:

  • Any rumors about blocking Netflix are false.
  • Peering agreements are negotiated commercial arrangements between providers like Comcast and Level 3 that carry traffic across the networks that comprise the Internet. These agreements have existed for over a decade.
  • Our agreement with Level 3 is no different than our agreements with its competitors.
  • 10. The bottom line is that this is a good, old-fashioned commercial peering dispute. It is not about online video, it is not a net neutrality issue, it is not about "paid prioritization," and it does not involve putting "toll booths" on the Internet.

It's a smart move on Comcast's part. If the battle is already being fought in the press - and it is - then the company really has nothing to lose. After all, it's in the best interests of Comcast to put as much spin on this if they want to preserve what's left of its consumer reputation. (Certainly, many already see Comcast as one of corporate America's evil empires.)

Likewise, they need to make the FCC understand that what they're doing isn't a challenge to Net Neutrality. Remember. Comcast has already been successful at keeping the government from dictating how they can use their network, thanks to a court ruling in April.

The FCC is already checking into Comcast on the matter of Comcast's acquisition of NBC Universal. Now, this controversy over delivery of online video - already a topic of interest for regulators - could douse optimism around final regulatory approval of that acquisition by the end of the year.

A Stifel Nicolaus investor's note today said that the allegations "come at a bad time for Comcast, and unless they're definitively and quickly knocked down or explained away," it could complicate the approval of the NBC Universal acquisition.

Another research note, by a Barclays Capital analyst, questioned the timing and Comcast's reaction. The note read:

The awkward timing makes us wonder why, assuming (Comcast) is contractually due the payments, it would choose to pursue them now, given the FCC's sensitivity around online video, rather than just letting the issue sit until after the NBCU deal is approved. As such, we believe that Level 3 may be the one pushing the peering payment issue now, given that its leverage would be much lower once the NBCU deal is approved.

None of this is to suggest that one side is right and the other is wrong on this issue or that neither side has long-term business motives. Simply put, the matter isn't as black-and-white as it might appear on the surface.

Hopefully, the FCC will keep that in-mind as it continues to look into both the Level 3 accusations and the implications of the NBC Universal acquisition.

Topic: Browser

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30 comments
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  • Comcast is wrong

    This is not about a "Peering Agreement". A Peering Agreement allows traffic to flow through an ISP's network on it's way to or from a 3rd parties network. (Imagine your neighbor cutting through your yard to get to another neighbor's house).

    All of the traffic that Comcast is receiving from Level 3 is destined for Comcast's customers. In other words, Comcast's own customers are both asking for the data and receiving the data. There is no 3rd party involved.

    This is not about Peering. It is a blatant move by Comcast to put up a toll both at the edge of their network and charge twice for the same service.
    sismoc
    • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

      @sismoc

      as far as i know, peering agreements only apply to traffic that is passing [i][b]through[/b][/i] the carrier, not terminating at a carrier's customer endpoints.
      erik.soderquist
  • I hope Comcast wins this one

    Why should my Comcast high-speed internet connection get even slower, why should I a non-NFLX parasite be impacted?

    Let NFLX build out its own internet network and pay for it. NFLX is simply trying to make more profit without incurring any costs in the process.

    GO COMCAST!
    DBA-MI
    • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

      @DBA-MI
      And lets kill all the ESPN and other sport crap while we are at it. I can not stand it. So why should I have to pay for it
      rparker009
      • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

        @rparker009

        Of course, let's get rid of anything that you don't like or use. The heck with everyone else!
        HaknGolfer
      • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

        @HaknGolfer

        And of course, let's get rid of anything that [b]you[/b] don't like or use. The heck with everyone else!
        ahh so
    • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

      @DBA-MI <br>Why should my ISP be allowed to decide which parts of the Internet I am allowed to access, and which parts of the Internet are off-limits?<br><br>If Comcast wants to have a walled-garden, then don't go around advertising it as the Internet. They should build <b>their own</b> worldwide interconnection of computers, providing access to only the services and content providers they want to approve. Comcast is simply trying to make more profit by advertising access to the "Internet" without doing their central duty -- namely, incurring the costs associated with actually delivering the Internet content their subscribers demand to access. Their job isn't to create, regulate, or discriminate the content, or to promote one provider of content over another. Their job is simply to provide the pipe through which the content creators are connected to the content consumers.<br><br>Go Netflix!
      lfmorrison
    • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

      @DBA-MI

      and you are privy to the amount Netflix is paying Level 3 to be the carrier? pray tell how you are privy to such information
      erik.soderquist
    • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

      @DBA-MI

      Your argument is not based on the facts. The Coscast usere have already paid for the bandwidth that they are using. The business model is that you buy a certain amount of bandwidth for a preset price and then you may use it however it meets your needs. Your needs may not include Netflix, but you probably have other used for the bandwidth that you have purchased. How would you feel if Comcast was blocking your content or charging the content provider that makes available the content that you use? Besides, regardless of whether Level 3 is charged for the Netflix traffic crossing the Comcast network, the traffic will flow, so your point is not valid.

      If you believe in a free and open Internet then the obvious solution is to charge the Comcast customers who are using the most bandwidth more money for their access, not to charge to content providers. Comcast is trying to make money on both ends and is attempting to stifle the competition of their own content. This cannot be allowed!
      HaknGolfer
    • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

      @DBA-MI
      Comcast is the one trying to maximise profits, in an arena where they compete poorly. They are trying to leverage their position as an ip to distort more out of its competitors. This in addition to being the worst cable provider on the planet. By the way, I'm not a Netflix subscriber either. However, tomorrow Bobby McGhee Streaming Services may come up with an offering that interest me. I do not want them hampered by the like of Comcast, in providing their services. Netflix today; someone else tomorrow! The only way to nip fraud in the bud is to act quickly to stiffle it.
      eargasm
    • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

      If Comcast invested in fiber optic technology to begin with (like Verizon did), we wouldn't be having this discussion.<br><br>Remember, this is the same fat corporate monopolistic parasite who promised their customers "unlimited access" only to have a monthly 250GB cap placed on their accounts.
      ahh so
    • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

      @DBA-MI

      actually, Netflix [i]is[/i] paying for the bandwidth, they are paying Level 3 to carry it. Comcast wants to charge extra because it is a competing service (direct competitor to Comcast's OnDemand service) and wants to mask it as a "peering agreement" dispute.
      erik.soderquist
  • Net Neutrality

    Why can't the FCC hire people fluent in the semantics of backbone and internet connectivity? As it stands, they are basing their decisions largely on the huge quantities of mis-information that are published by the content providers themselves.
    scubaj
    • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

      @scubaj

      No, actually, during the Bush years, all their "data" came from reports from ISPs, in large part Comcast.
      tkejlboom
  • This is not really about right or wrong, it is about profit

    In my area, Comcast has a monopoly on cable television. It buys out every competitor, even after many voters wanted competion on cable service. Like telephone companies, they find a way to charge for every little thing they can. In my area, they changed service where you MUST get a cable box to receive upper channels. <br><br>This is not, necessarily, wrong, it is business. What brings attention is that the publc now has more public forums to complain about rising costs. Like Banks and Credit Card companies, this will keep happening until customers start leaving Comcast internet service, that is the real power of the public.
    DadsPad
    • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

      @DadsPad

      Comcast is not a natural monopoly. The problem is that people keep looking for the free market to fix the problem when cable isn't a free market. I think the most viable solution right now is for neighborhood associations and other non profit collectives at the neighborhood level should take over last mile internet communications for themselves.
      tkejlboom
      • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

        @tkejlboom
        thanks for your reply, but notice I started my email with "In my area". I did not indicate it was a national monopoly, but if it comes in your area, you might just see what I mean. :)
        DadsPad
  • I think a free market solution is in order here.

    Basically, Comcast's deal with NBC will set up a huge horizontal monopoly. In a classic Adam Smith Free Market it is the role of the government to break these monopolies up. There should be some real competition in every micro-market for not only content but content delivery.

    Basically when Comcast buys NBC, how is that going to affect other content providers such as Netflix? Level 3 is going to pass the inflated cost of increased network traffic on to it's customers, Netflix in this case. Will NBC have to pay more to go over a Comcast delivery system? Probably not.

    Monopolies are very bad for consumers and for society in general. If Comcast manages to buy NBC, they become not only a content delivery system but a content provider as well. That is truly dangerous to consumers and society in general.
    mr1972
    • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

      @mr1972

      Comcast already is a content provider on several levels, buying NBC will just make them a bigger one
      erik.soderquist
  • RE: Comcast-Level 3 fight goes public: Is this really about Net Neutrality?

    I don't disagree with the idea that Comcast want to earn more money from their infrastructure. They are a private company and they have a right to do that. There was a poll about this earlier, http://my-take.com/poll/Should-comcast-be-allowed-to-charge-websites-for-web-traffic The internet isn't free and there are a lot of physical costs to make it work. Considering how popular streaming is and how much bandwidth it takes up, Level 3 should have expected to pay higher fees. Comcast has a right to single out Netflix because their site now accounts for a large percentage of the web traffic. Even if this is a net neutrality case, I'm not sure what the government can legally do in this case. From a capitalistic point of view, Comcast is doing very well for itself. Unless we recognize that the internet is a right, or have more competition. We are basically powerless against Comcast.
    BTerada