Comcast, Level 3, Network Neutrality, and your Internet

It’s finally happened. A major ISP, Comcast, is "taxing" Level 3 Communications for streaming Netflix movies to your door. Welcome to the end of network neutrality.
Written by Steven Vaughan-Nichols, Senior Contributing Editor

Network neutrality is a simple concept: ISPs shouldn’t play favorites with the content that goes over their parts of the Internet. It’s a concept that harks back to the Commercial Internet Exchange (CIX) in 1991 when the first Internet carries agreed to share connections equally with each other. Although CIX is now largely forgotten, it’s what started the Internet on its way from a backwater for researchers and schools to the omnipresent network in which we live, work, and play today.

Now, Comcast, appears to be the first major ISP to break that old CIX rule of network neutrality. Level 3 Communications, one of Netflix’s content delivery network (CDN) partners has accused Comcast of charging Level 3 extra fees for carrying Netflix’s movies.

Thomas Stortz, Chief Legal Officer of Level 3, wrote that out of the blue “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.”

Stortz added: “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.”

Comcast claims otherwise. To hear its side of the story, this is just an old-fashioned business disagreement over peering. Peering, which was also an issue hashed out by CIX back in the early 90s, concerns how much traffic one ISP can carry of another ISP’s traffic before charging additional fees. Comcast claims that Level 3 wanted Comcast to carry five times the traffic it was sending to Level 3.

That, if true, sounds fair. But think about it for a moment. Who is asking for all that Level 3/Netflix traffic? Comcast’s own customers, of course. The last thing Comcast wants is to charge its customers more. But, if the company can force the expense on Level 3, and from them to Netflix, then Netflix will be the one in trouble with customers, not Comcast.

I call a foul on Comcast. This strikes me not only as a violation of network neutrality, but as remarkably short-sighted.

Comcast, you may remember, is buying NBC Universal. NBC, in turn, is one of the companies behind Hulu. Guess who just opened its own subscription-based Internet TV service, Hulu Plus? Why, yes, if you follow the dots, this means that Comcast is on the ground-floor of what should eventually be Netflix’s main competitor.

Let me add that Netflix’s new online video-only monthly fee is $7.99 and that Hulu Plus is also --what a surprise!-- also $7.99 per month. From Comcast’s viewpoint, wouldn’t it be great if Netflix had to raise its rates?

If you also think that Comcast is playing fast and loose with network neutrality for its own gain, Consumer Union, best known as Consumer Reports’ parent company, has started a petition to block the Comcast/NBC merger. In addition, Progressive Change, a liberal political group, has initiated a petition demanding that the FCC make sure that Internet traffic be “free of any interference from network operators like Comcast.” I recommend signing both.

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