Is Comcast trying to extract fees from Level 3 in order to protect its cable TV business?
That’s the accusation Level 3 has made against the cable giant, and the network provider kept the dispute over interconnection fees burning with a 19-point FAQ on Friday (see Level 3 Plays Politics In Internet Peering Spat With Comcast, Comcast Open To FCC’s Participation In Resolving Level 3 Dispute, Level 3: Comcast Doesn’t Have Right To Set Pricing For Network Access and Level 3 Alleges Comcast Demanded Fees To Deliver Internet Content).
“Comcast is a cable TV service provider. In addition to simply extracting monopoly profits, Comcast also has a strong motive to discourage competition with its cable TV service. Online distribution of movies, TV shows and other content threatens Comcast’s traditional ‘closed’ video distribution model,” Level 3 said.
I don’t buy that argument. Comcast isn’t objecting to the fact that Level 3 is asking it to carry Netflix traffic — only that Level 3 is dumping twice as many bits on the MSO’s network. Video happens to be a bandwidth-hungry application.
Comcast has called the disagreement “a good old-fashioned peering dispute” but Level 3 says that’s wrong: “Unlike ‘peering’ in the Internet backbone, where competition abounds and prices have been declining steadily, Internet carriers that have content requested by Comcast subscribers have no choice but to exchange traffic with Comcast.”
Because consumers basically have a choice between two broadband providers — the local cable company and the local phone company — the danger is that the Comcasts of the world will abuse that, according to Level 3. “Comcast is using this dominant position to demand payment for traffic delivered at its customers’ requests. You simply cannot ‘route around’ Comcast to provide requested content to Comcast’s subscribers,” the company said.
But this is obviously not a new development.
Level 3 is suggesting that — suddenly — the market is flawed. Instead, what seems to have happened is Level 3 suddenly looks a whole lot more like a content distribution network than an Internet backbone. And it’s not happy about Comcast’s defensible position that Level 3 should pay interconnection fees.
By the way, Level 3 claims that “no other broadband access provider in the U.S. is now charging Level 3 the type of fees that Comcast is charging.”
Meanwhile, Comcast earlier this week posted a video with John Schanz, executive VP of national engineering and technology operations, explaining the MSO’s position on the issue, one of five posts on the Level 3 dispute on blog.comcast.com.
Also, this piece by Daniel Golding, previously AOL’s global peering manager, on GigaOm walks through the history of Internet peering and analyzes the Comcast/Level 3 dust-up very nicely.
UPDATE: Comcast issued this statement Friday afternoon about Level 3’s latest press release: “Level 3 has said nothing new. The fact remains this is a business dispute regarding traffic ratios, commonly referred to as peering, between Comcast and Level 3 which we are committed to resolve fairly and consistently with established industry principles. Industry experts and analysts overwhelmingly agree, as their commentary has shown all week long. The most important thing to know about this dispute is that Comcast will do absolutely nothing to impact our high-speed Internet customers, who can and will be able to access any Internet content they want, including streaming video from all sources.”