US cable giant Comcast accused of internet video 'toll booth'

Internet backbone provider Level 3 Communications says that US cable outfit Comcast is demanding a recurring fee for transmitting internet movies and "other content" to Comcast customers who request the content, accusing the cable provider of violating the Federal Communications Commission's "net neutrality" principles. But Comcast says Level 3 is misrepresenting the negotiations between the two companies.

"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," reads a statement from Level 3 chief legal officer Thomas Stortz. "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."

According to Storz's statement, Comcast first made its demand on November 19, and on November 22, Level 3 agreed to the terms "under protest, in order to ensure customers did not experience any disruptions."

Earlier this month, movie rental outfit Netflix announced that Level 3 will be the primary content delivery network provider for its internet-based streaming video service, which is available via PCs but is also embedded in various gaming consoles and TVs.

In addition to offering traditional cable TV service, Comcast offers on-demand access to movies and television shows through its Project Infinity.

Asked to comment on Storz's statement, Comcast pointed us to a statement of its own from Joe Waz, senior vice president of external affairs and public policy counsel. "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," the statement reads.

"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."

This is in stark contrast to Level 3's statement, which frames the two companies' spat in terms of net neutrality. "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," Level 3's statement reads.

"While the network neutrality debate in Washington has focused on what actions a broadband access provider might take to filter, prioritize or manage content requested by its subscribers, Comcast's decision goes well beyond this. With this action, Comcast is preventing competing content from ever being delivered to Comcast's subscribers at all, unless Comcast's unilaterally-determined toll is paid — even though Comcast's subscribers requested the content. With this action, Comcast demonstrates the risk of a 'closed' Internet, where a retail broadband Internet access provider decides whether and how their subscribers interact with content."

Comcast dubs Level 3's position "duplicitous."

"When another network provider tried to pass traffic onto Level 3 this way, Level 3 said this is not the way settlement-free peering works in the Internet world. When traffic is way out of balance, Level 3 said, it will insist on a commercially negotiated solution," Comcast's statement reads.

Comcast says it's meeting with Level 3 later this week to further discuss the matter. "We are happy to maintain a balanced, no-cost traffic exchange with Level 3," Comcast says. "However, when one provider exploits this type of relationship by pushing the burden of massive traffic growth onto the other provider and its customers, we believe this is not fair." ®