Level 3 vs. Comcast - Charging for Off-Net Internet Video?

   

Is Comcast encouraged by its win against the FCC (here) and decided to take it one step further in order to support its own (or NBC's) video content- or this is just a business argument over settlement-free peering agreement?

Level 3 Communications [a CDN operator, won recently a new contract with the popular video streaming service NetFlix - here see map below] issued a press release saying that "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".

See "Level 3 Communications Issues Statement Concerning Comcast's Actions" - here.

Thomas Stortz, Chief Legal Officer of Level 3, is quoted saying that "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 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"

Comcast's response, by Joe Waz, SVP, External Affairs and Public Policy Counsel was "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."

See "Comcast Comments on Level 3" - here.

Complicated, but probably another opportunity for the traffic management market.