Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

Summary: Level 3 and Comcast are duking it out over transmitting online movies and here's the big question: Will the right to stream Netflix start a net neutrality debate?

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Level 3 and Comcast are duking it out over transmitting online movies and here's the big question: Will the right to stream Netflix start a net neutrality debate? In a strong statement, Level 3 said that Comcast is asking for a "recurring fee" to transmit Internet online movies. Thomas Stortz, chief legal officer of Level 3, said:

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.

Level 3 said it agreed to the terms Nov. 22 under protest.

Comcast disagreed with Level 3's claims. In a blog post, the company said:

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.

There are two elephants in the room here. First, there's net neutrality, a card that Level 3 is playing now. The other elephant is Netflix. It is quite the coincidence that Level 3 just won a deal to be the primary content delivery network for Netflix's online streaming service.

If you connect the dots you get quite a tale for the Federal Communications Commission, which doesn't currently have the authority to do much on the net neutrality front. Level 3 gets Netflix's business. Netflix could be construed as a Comcast rival. Comcast asks for a carriage fee. Comcast CEO Brian Roberts earlier this year gave Netflix its due. Roberts said in July:

On Netflix, they have done a great job. They offer a nice product and I think all we can do is try to make our products better. A number of the on-demand offerings have improved dramatically. We have something we call [Project Infinity] that has a significant leap forward in the amount of on-demand content from libraries servers. We are very excited about the potential of that technology.

In the end, we get some high-profile negotiations, the FCC and perhaps an excuse to seriously start net neutrality as a topic again.

Topics: Government US, Broadband, Browser, Government, Networking, Telcos

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  • RE: Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

    vcxvsd
    sdfsdfvxcv
    • RE: Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

      Sounds time to boycot Comcast
      rparker009
  • it's monopoly all over again

    they got over it with voice, so they're blazing new trails with data!
    sparkle farkle
  • Comcast would love to destroy Netfix

    Netfix is canibalizing them by taking away customers and pay-per-view sales. While a single PPV movie on Comcast would cost $5 ... Netfix is selling unlimited movies for $8.

    Now which one would you want to pay? $8 for unlimited or $5 for just one?
    wackoae
    • agree, but Comcast will have much more new releases than Netflix...

      @wackoae.. Netflix offering is not really a lot of the new stuff.. there IS no longer a reason to watch older stuff on cable anymore though.. and people are getting out of the mould of 'i have to watch this the instant it gets out'..

      but Comcast is kind of out of gas because Netflix/Level 3 isn't just transiting their network to sell services to some other random people off the street.. they are transporting content to Comcast's own customers.. you know the guys that are paying for the network to be up in the first place.. if Comcast thinks that certain of ITS customers are monopolizing the network then they need to charge those customers directly not charge Level 3 for providing content to Comcast customers who are requesting it..
      doctorSpoc
      • RE: Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

        @doctorSpoc

        Thank you for a response with a solution that follows common sense. If the customer wants something that costs money, let him pay for it. There is nothing wrong whatsoever to charge an end user appropriately for both bandwidth and total volume. In fact that is what makes the most sense.
        Michael Kelly
      • isnt that what i pay for?

        @doctorSpoc.. I thought that is what i pay for. I pay comcast a higher amount for larger bandwidth. What i want to do with that bandwidth is my business. Comcast already trying to cap the amount i can download as it is
        tiderulz
      • RE: Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

        @tiderulz

        The fact of the matter is that Comcast has every right to profit from their investment. If they feel that they need additional billing to earn that profit, then that is their prerogative. We as customers have a choice to go to one of their competitors if we feel we can get a better deal. However Comcast should bill fairly, and that means billing the people who are creating the network traffic. Level 3 does not create traffic, it provides content that is there for the taking. End users create the traffic. And the fair way for Comcast to recoup their investment is to bill the people who create the traffic (its customers) and to do it in a way that the ones who use the most traffic pay the most.

        It's how all other utility companies bill their customers and make their profits. The water company does not bill the faucet company for the right to have its water pass through its faucet. And the water company does not bill a customer who uses two gallons of water a day the same amount as it bills a customer who uses 100 gallons a day. Yet Comcast wants to bill the faucet company and you refuse to pay more than the guy who only uses two gallons of water a day. This is the insanity that needs to be roped in.
        Michael Kelly
      • netflix=water company

        @Michael Kelly
        your water analogy does not make sense. The water company would be analogous to Netflix. They are the content. And i agree that Comcast has every right to profit from their investment, but that is what they charge their customers a monthly fee for, whether you use all your "allowed" download capacity or not. If they want to meter it, they would be well within their rights. But they are trying to charge for the content out in the world also.
        tiderulz
  • It seems to me there is an "EASY FIX..."

    Have NetFlix send back a copy of all packets received to "balance the load" and so NetFlix can confirm the packets were properly delivered... See how ComCast feels about having to send the traffic both ways... Asinine... I am VERY glad I am NOT a ComCast "customer." I guess all ComCast customers could run a daemon to send "random" traffic to Level3 to "balance the load..."
    wonderbored
  • RE: Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

    so basically comcast wants to charge TWICE for the SAME DATA. A customer of comcast pays a fee (no idea price, i don't have them) for "unlimited" internet access within a certain speed restraint. comcast sees that their customers seem to be utilizing this "unlimited" access, so they decide they can then make money off the other end of the pipe and charges level 3 for "access" to "their" internet.

    'effing bastards!
    zachg@...
  • RE: Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

    Simple solution. Pass on the costs to comcasts customers.
    You call it a greedy ISP recovery charge and let the customers know about more affordable alternatives.
    richard233
  • RE: Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

    When it comes to "being an ISP", what I want is for Comcast to push bits as fast as it claims it can, without throttling throughput unreasonably.

    When it comes to "being a content provider", what I want is for Comcast to offer it's Infinity product to any customer whether or not a Comcast-owned cable feeds into their home.

    They're already at 50% gross margins on what they charge me, so I don't have a lot of allegiance to their point of view.
    Rob Perkins
    • RE: Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

      @Rob Perkins

      if you are that dissatisfied with their rates, why are you still a customer?
      erik.soderquist
      • RE: Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

        @erik.soderquist I've made no assertion that I am dissatisfied. In fact, I'm very satisfied; Comcast operates a very robust and reliable network for my use. I think the reliability over the last seven years has been at six nines. And there's no other game in town at those data rates anyway.

        But when it comes to the content delivery business, I do think they need to stop whining and just use the Netflix model, which works.
        Rob Perkins
      • RE: Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

        @Rob Perkins <br><br>fair enough.<br><br>i wish they were reliable in my area.
        erik.soderquist
  • I don't use...

    ComCast or Netflix. From what I'm seeing here I don't think I'm missing anything. The local video store is next door to Quizno's and NetFlix / ComCast have yet to offer the ability to download a roast beef sandwich to munch whilst I'm watching a movie. I'll keep doing it the old fashioned way. Popcorn, anyone?
    neverhome
  • RE: Level 3, Comcast spar over Net 'toll booth'; Right to stream Netflix at stake?

    Comcast sounds like a school yard bully demanding your lunch money. What happens when every site out there expects payment for access to their site?
    rengek
  • What a load of horse manure.

    If I am a Comcast customer (I'm not, this type of crap is why), and I'm paying for "unlimited Internet" then it's none of their business who is at the other end of the connection. Their job is to deliver the packets to/from my modem at the speed that was agreed to, nothing more, nothing less.
    PepperdotNet
  • Comcast rates

    I have Comcast triple play and I pay over $150 a monmth for Internet, Phone and cable with HD and NFL sports package...to add HBO or other premium channel for movies would cost me $20 per month and $5 per On Demand movie...that is why I signed up for Netflix for $10 / month...any more charges would just be a ripoff...that is just the facts...I pay $50 of my monthly just for Internet, so what I do with that is my business, not their...if they want, just sell their products at more reasonable rates and they wouldn't lose any business...as it is I am paying for everthing and then some!
    daniel.melanson@...