Level 3 Communications brought the fight with Comcast over Internet connection fees to the Dept. of Justice and the Federal Communications Commission Thursday, asking the agencies to impose conditions on the MSO's deal for NBC Universal that would guarantee large backbone providers like Level 3 wouldn't have to pay Comcast to deliver Internet traffic for five years.
Last month Level 3 issued a press release complaining that Comcast was erecting a "toll booth" on the Internet by demanding payment to deliver additional traffic, after Level 3 landed a contract as a primary content delivery network for Netflix. Level 3 accused Comcast of violating network neutrality principles.
The cable operator said Level 3 was asking to dump twice the amount of traffic on its network without paying customary CDN fees.
"While Comcast has attempted to portray Level 3's disagreement with the charges that Comcast wants to impose as merely an 'old fashioned peering dispute' or merely a 'commercial disagreement,' it is clear to us that much broader policy implications are at stake, significantly impacting competition in the delivery of all video programming and the future of the Internet," Level 3 CEO James Crowe wrote in a letter to DOJ and FCC officials.
Specifically, Level 3 wants the FCC and DOJ to impose conditions in effect for five years following the closing of the Comcast/NBCU deal that would force the cable operator to provide cost-free interconnects with requesting Internet backbone companies "meeting such nondiscriminatory, fair and reasonable requirement as Comcast may choose to specify." Level 3 suggested the criteria for settlement-free interconnection may include the number of announced routes and the extent of customer interaction between the networks.
In any case, the location and technical configuration of interconnection points for the exchange of traffic between Comcast and requesting Internet backbone carriers "must be technically, operationally and economically nondiscriminatory, fair and reasonable (and in any event no less advantageous than the terms effectively provided to its affiliates)," Level 3 said.
Level 3 also wants the FCC to consider broadly applying similar requirements on other broadband Internet access providers.
"Without any oversight by regulators, residential broadband Internet service providers will undoubtedly follow Comcast's example and use their dominant market position in interconnection to stifle competition and innovation within the Internet," Crowe said.
A copy of Level 3's letter is available here: http://fjallfoss.fcc.gov/ecfs/document/view?id=7020924318.
Comcast vice president of government communications Sena Fitzmaurice Friday morning said the cable operator was preparing an official response to Level 3's letter to the DOJ and FCC, which was issued late Thursday. Previously Comcast said it would be open to having the FCC oversee negotiations with Level 3 to resolve the dispute.
"While Level 3 has filed requests with the FCC and DOJ to make an unrelated business matter part of the review of the Comcast-NBCU transaction, we've continued to reach out for marketplace solutions," Fitzmaurice said in an e-mailed statement.
In a blog post Thursday, John Schanz, Comcast executive vice president of national engineering and technical operations, said the MSO within the last two days proposed changing the way it connects with Level 3 and that it wouldn't charge Level 3 for access while the two determine "the actual costs of the new approach."
However, according to Schanz, "Level 3 chose to leave the meeting when we wouldn't agree to a 'zero cost' outcome without the benefit of a trial and the opportunity to understand -- with Level 3 -- the full implications of the new approach, including the impact on our mutual customers," Schanz wrote.
Added Schanz, "Everyone knows that networks have investments and costs to operate over the longer term; Level 3 effectively demanded unlimited capacity at our cost."
Level 3 has accused Comcast of effectively charging a fee -- determined unilaterally by Comcast -- to enable delivery of content requested by Comcast's subscribers.
"The question, quite simply, is whether Comcast and other residential broadband Internet service providers should be allowed to use their dominant control over access to their subscribers' eyes and ears in order to coerce payments from broadband backbone and independent content providers," Crowe wrote in the letter.
Absent governmental restrictions, Crowe said, "Comcast and other residential broadband Internet service providers have the power to leverage their relationships with broadband consumers to act in an anticompetitive manner."