Level 3 'Clarifies' Position On Comcast Fees - Consumer Affairs

Mark Huffman
ConsumerAffairs.com

December 6, 2010
In case there was any confusion about its position on Comcast's new fees, Level 3 Communications has issued another statement on the controversy.

The issue first surfaced last week when Level 3 complained that Comcast has announced its intention to levy ongoing fees for delivering content to Comcast, such as movies, that Comcast's subscribers have requested. Level 3 is a major supplier of streaming technology for NetFlix, which delivers video content via the Internet.

Comcast has countered that Level 3 is trying to gain an unfair advantage over competitors by using Comcast's network to deliver content without paying for it.

"Comcast's characterization could not be more misleading," Level 3 said in a statement.  "What is truly at stake is whether consumers should have unfettered access to all the content on the Internet without regard to whether that content happens to be owned or packaged by Comcast."

Supporters of the concept of Net neutrality have seized on the controversy as an illustration of why the policy is needed. They say consumers will end up paying more for some content if network providers are able to discriminate among content providers. Opponents, on the other hand, say it perfectly illustrates why Net neutrality is unfair to network operators.

Level 3 says the disagreement is not a "peering dispute,†as Comcast has characterized it.

"At issue is a fundamental interconnection disagreement between Comcast, as a provider of local high speed Internet access to consumers who pay Comcast for access to content, and Level 3, which delivers content to residential broadband access providers like Comcast in response to consumer requests,†the company said.

Unlike "peering" in the Internet backbone, where competition abounds and prices have been declining steadily, Level 3 said, Internet carriers that have content requested by Comcast subscribers have no choice but to exchange traffic with Comcast.

"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," Level 3 said.

Comcast says the fees it charges are commonplace and standard within the industry. Level 3 says that's not the case.

"No other broadband access provider in the U.S. is now charging Level 3 the type of fees that Comcast is charging," the company said. "It is Comcast that seeks to change the common approach, changing the rules of the game in an unreasonable and discriminatory manner."

The controversy began last month with NetFlix retained Level 3 to provide the bulk of the streaming services needed to send movies to subscribers. Level 3 asked Comcast and other Internet Service Providers to give it more access to their networks so they could handled the expected increase in traffic from NetFlix.

When Level 3 asked Comcast for new interconnection ports to its network, it didn't expect to pay anything for that since it said it was providing content requested by Comcast customers. Comcast, while also sells video content to its subscribers, views it as unfair competition, and says paying a fee to deliver content over its network is reasonable.

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