Net Neutrality Irrelevant? Comcast Charges Netflix Delivery Service Unfair Fees.

[Kludge]

Whoops. Probably not the best move when Net Neutrality legislation is on the table.

"WASHINGTON (AP) — Level 3 Communications Inc., an Internet backbone company that supports Netflix Inc.’s increasingly popular movie streaming service, complained Monday that cable giant Comcast Corp. is charging it an unfair fee for the right to send data to its subscribers.

Comcast replied it is being swamped by a flood of data and needs to be paid.

Level 3 said it agreed to pay under protest, but that the fee violates the principles of an “open Internet.” It also goes against the Federal Communications Commission’s proposed rules preventing broadband Internet providers from favoring certain types of traffic, it said."

More @ http://dailycaller.com/2010/11/29/web-delivery-firm-says-comcast-taking-toll-on-data/

[Liberty Rebellion]

Two problems for the MSO's I see:

1)Netflix is directly competing with cable and video on demand offerings.

2)MSO's have done a shoddy job of advertising Internet packages where people think they will be able to get 10Mbps 24x7x365. MSO's aren't built out to that capacity (that I know of).

I think metered billing is the only way to go for the bandwidth issue and better advertising so the subscribers know what they are getting rather than burying it in the TOS

For the video content competition, they normally would have to adjust their prices, negoatiate new contracts, and offer new content to compete.

What Comcast will probably arrange to with Level 3 is some sort of contract renegotiation for Transit services to recoup the loss of revenue due to subs going to Netflix (I work for an MSO and I use Netflix 99.9% of the time over free VOD offerings and half off of new Video on Demand) and the cost to build out their network to handle the new load Netflix and Internet based video services will bring (have brought) to their network

[Live_Free_Or_Die]

Netflix pays a big bandwidth to stream movies.
Comcast subscribers pay for bandwidth to receive movies.
Backbone providers have access agreements.

Everyone is paying for bandwidth... what is the problem?

[Liberty Rebellion]

Netflix pays a big bandwidth to stream movies.
Comcast subscribers pay for bandwidth to receive movies.
Backbone providers have access agreements.

Everyone is paying for bandwidth... what is the problem?


If Comcast's contracts with Level 3 are anything like the MSO I work for then Comcast is paying Level 3 for so much bandwidth per/month and being charged more if they don't utilize up to the 95th percentile.

However, Comcast is a new transit AS, so depending upon how much traffic Comcast sends Level 3 would go into how their contract is negotiated.

Assuming either scenario, it seems like what Comcast is doing is trying to recoup the costs of building out their insufficient network to support more Internet video services, recouping lost revenue from subscribers choosing Netflix over their own video offerings, or both.

[Liberty Rebellion]

Comcast posted this on their blog. Looks like they do settlement-free peering


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.

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.

Level 3's position is simply 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.

Now, Level 3 proposes to send traffic to Comcast at a 5:1 ratio over what Comcast sends to Level 3, so Comcast is proposing the same type of commercial solution endorsed by Level 3. Comcast is meeting with Level 3 later this week for that purpose. We are happy to maintain a balanced, no-cost traffic exchange with Level 3. 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.




http://www.dslreports.com/shownews/Level3-Accuses-Comcast-Of-Net-Neutrality-Violation-111586

[Liberty Rebellion]

Looks like Level 3 has been on Comcast's side of the fence before as well

http://www.prnewswire.com/news-releases/level-3-issues-statement-concerning-internet-peering-and-cogent-communications-55014572.html

[Kludge]

It's been speculated the BS story (along with another where a company is alleging Comcast is targeting them with over-charging them for "device testing" fees) has made rounds in effort to hinder the NBC/Comcast merger.4.

http://www.techdirt.com/articles/20101129/17242612047/companies-come-out-woodwork-to-claim-comcast-is-violating-net-neutrality-exaggerations-abound.shtml