The news that Level 3, which has just partnered with Netflix on online video delivery, thinks Comcast is charging them for fast service, brings the debate on net neutrality to a whole new level.
Netflix has made online streaming a major part of their business model. I’ve used the online service before and was amazed at the quality, which with Level 3′s participation should only improve. The service has become wildly popular: Netflix streaming represents 20% of all bandwidth use in prime-time hours, according to one study.
That makes it a prime target for fees. And Comcast has taken the first shot.
Level 3, which helps to deliver Netflix’s streaming movies, said Comcast had effectively erected a tollbooth that “threatens the open Internet,” and indicated that it would seek government intervention. Comcast quickly denied that the clash had anything to do with network neutrality, instead calling it “a simple commercial dispute.”
The dispute highlighted the growing importance of Internet video delivery — an area that some people say needs to be monitored more closely by regulators. Net neutrality, which posits that Internet traffic should be free of any interference from network operators like Comcast, is thought to be on the December agenda of the Federal Communications Commission.
“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,” Thomas C. Stortz, the chief legal officer for Level 3, said in a statement Monday.
I don’t know what Level 3 is talking about if they think this has nothing to do with net neutrality. It’s exactly what open Internet advocates have feared for a long time. Level 3 may have the money to pay Comcast – they grudgingly accepted the fee three days after being informed of it on November 19. But that payment will determine whether they can bring their service to users. As a result, the Internet becomes confined based on ability to pay the telecoms. This is the entire issue.
In addition, Comcast isn’t just an ISP – they’re about to purchase a major broadcast network. If you think that they won’t use their ability to turn on and off the Internet pipe in ways that favor NBC, you’re crazy.
With Netflix streaming so popular – the company is changing their business model to encourage streaming by lowering monthly rates relative to mailing DVDs – this has the ability to make net neutrality a front-line issue. “They want to take away your Netflix” is simply a stronger argument than jargon-heavy statements about packet delivery and the like. The Progressive Change Campaign Committee has already jumped on this issue in an email to supporters:
BREAKING: The New York Times just reported that Comcast will block Netflix unless a new fee is paid to Comcast — so Netflix’s price goes up and people use Comcast’s video service instead.
This outrageous abuse of power by Comcast comes on the very week that President Obama’s FCC Chairman Julius Genachowski will announce whether he’ll fulfill Obama’s promise to protect the open Internet and Net Neutrality — which would prevent this type of corporate abuse.
The FCC needs to hear from us now, before the chairman’s big announcement this week.
They have a petition available at the link. They have already assembled 30,000 signatures.




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It has been obvious for some time that “The fix is in” re the Obama admin and net neutrality. The decision could have been made months ago – like the decision to give Liz Warren actual rather than illusory power. The fact that it wasn’t speaks volumes.
By all means, though, sign the petition. It’s our last, faint, hope.
Net neutrality is dead. RIP.
It’s a done deal.
The more I read FDL, the more obvious it is that the fix is IN on everything the Obama administration does. They are tools of corporate power, nothing more. oh, and we are SO screwed.
Comcast says it isn’t a net neutrality issue, Level 3 clearly says that it is. I forwarded the PCCC message to a Netflix employee who said they are not involved with such efforts; I suggested they should be. Credo has a petition up, as well.
We are several outrages overdue for a Comcast boycott.
Regarding comments along the lines of “it’s a done deal” “the fix is in” just take a moment in think of what you’re saying.
If you’re the same commenters griping about Obama “precapitulation” look at your comment and realize you are doing the same thing.
Yes, you don’t have power like the electeds do, but the power you DO have is the power you SHOULD exercise; FIGHT!
Nag your congresscritter, the president, your ISP, anybody you can think of. And do it relentlessly.
Signed the petition, along with the comment that I was a FORMER Comcast customer and that their customer service was abysmal.
Chris in Paris on America blog normally has a bunch to say about how much cheaper cable, cell phone service and internet is in Socialist France.
This is more evidence the free market does not work.
Airline and the phone companies after deregulation are other examples.
Sorry Kelly. You’re right, of course.
But there are times, and today is one of ‘em, where it just really feels like it’s just so pre-scripted that nothing short of a real miracle would change things.
Probably best I don’t comment on those days.
Anyways, thanks for teh little swat back into reality. *g*
I’ve got a question… I’m a DishTV customer and Netflix customer. I can access TV shows and movies instantly from Netflix on my Wii. What the fuck does Comcast have to do with me? Is Netflix using Comcast’s cables? I’m befused and confuddled…
Understood. Odds are bad. But that doesn’t = “Don’t fight.”
The way you get to use Netflix on your Wii is that your Wii has to connect to the Internet through your internet provider, whether it’s Comcast or some other cable or phone company in your area. The DishTV has absolutely nothing to do with it.
Let’s clarify that a bit:
Comcast declared a gate-fee on all Comcast customers that Netflix/Level3 delivers videos to. They could not declare a gate-fee on some one elses customers.
So since Dish customers connect via satellite, no Comcast gate-fee.
@ khook321 (#12) and Kelly Canfield (#13):
Thanks for the clarification. Our DSL line comes through BellSouth, so I guess this doesn’t really apply to me personally… THIS TIME.
How does Comcast suck? Let me count the ways… We got rid of them about 3 years ago and they STILL come by ringing the doorbell doing their “all is forgiven, please come home” routine. I enjoy sending them off with a flea in the ear. I’m not nasty, but I make it abundantly clear to the poor schmuck they’ve sent to my door EXACTLY why we’re no longer customers.
I just started using comcast a few months ago for my roomates HD and to watch F1…don’t like to be contributing to the downfall of the inter-tubez, but didn’t want to get dish network. still have Qwest for DSL & voice, but Comcast has the cable market locked up.
Any reason you don’t want DishTV? They’ve been absolutely flawless for us. Comcast would go off for hours without a cloud in the sky, and DishTV keeps on going unless there’s nearly a monsoon… ON EDIT — HD TV is free with DishTV.
no rational reason that I can think of besides not wanting a dish on my roof…my have to re-evaluate my logic there…
Not to support Comcast, but someone has to pay for the bandwidth at all stages of the network. The better solution maybe for Comcast to jack the fees by number and timeliness of bytes used. Because the US has a lousy
internet there is not enough capacity for every one to sit down to Netflx in prime time.
This is not about net neutrality, this is about bandwidth is not a free ride for Netflx, or Hulu etc.
The question is who is going to pay for the bandwidth usage. It is the viewer or Netflx, because until the internet costs are zero, someone has to pay.
Eli is upstairs!
Cuobama
All access is paid for now, either thru the individual’s ISP fees, or whomever is providing ‘free’ wifi. They already charge their users more for supposedly higher speeds, now they want to charge the content provider as well.
Note this did not come about from folks complaining about their slow Netflix downloads and along with Comcast announcing how they’ll invest the fees in improved bandwidth. The only bandwidth they care about is how fast they can send dollars to their bottom line.
No… that’s incorrect, Green Giant. Comcast is already charging the customer for cable internet service. Plenty. Like 50-60 month for cable per month after whatever promo you start with expires.
Comcast wants to start to double it’s profits on the same bandwidth their customers are paying 50-60 a month for.
Comcast has sales of 35 Billion a year and profits of 3.6 Billion a year after taxes and 6 Billion of depreciation. Their net worth is above 0 only because they have 65 Billion in intangibles, i.e. make believe assets.
Comcast invests about 4 Billion a year.
I think their sales are going to crash with the current depression, I saw quite a few people turning in their TV modems when I did.
They already have terminated accounts with using too much bandwidth, and I can agree they should have just gotten stinkier and terminated Netflx user accounts instead of trying to get the source to pay.
I dont want my minimal usage monthly charges going up just so the neighbor can watch more YouTube. If they do, I’ll go back to modem.
And I don’t have any kids — why should I pay to support schools?
This is shortsighted almost beyond belief from any progressive point of view; it sounds like something a Tea Partier would say. If you want to be able to use the Internet for progressive organizing, you’d better make its freedom a high priority, and be prepared to put your money where your mouth is; your current usage levels are irrelevant, as is obsolete modem technology. If net neutrality is lost, you can bet the farm that Scumcast and other elements of what Bagdikian calls The New Media Monopoly (in his book of that title) will use their control over rates to make it harder to access political content that they don’t like, especially if it criticizes their monopoly. If you think the current mainstream media are bad, wait until they can use surcharges to control access. And you won’t save any money in the end, anyway; they’ll also use these surcharges to extract even more money from their monopolistic control, especially if they’re having trouble maintaining profitability by other means.
We ought to be moving in the opposite direction: nationalizing companies like Scumcast, spinning off their content-producing subsidiaries as separate companies, and providing free broadband to every citizen, as some European nations already do. But in the current political environment, we’ll be doing well just to maintain Net neutrality.
Absolutely, I couldn’t've said it better. And I agree that we should all sign the petition. But when I try to follow the link given, I just get the general PCCC site, and I can’t find the petition on it. Could you please provide a direct link to the petition in a reply to this message?
Uh, David – you do know that Comcast is now operating its own Movie Download service at the Comcast Store, right? And that Verizon announced just today that THEY are also opening a movie store? These two gorillas plan to squeeze competitor Netflix right out of existence with these fees. That’s not just abuse of Net Neutrality, that’s a pure antitrust violation, even with a merger case on review at DOJ. Brian Roberts is as arrogant as they come.
This article is completely mistaken. It is nothing but a simple peering agreement between Level 3 and Comcast. It has nothing to do with Net Neutrality.
Peering agreements have been common since the 1990s. Even uTube, owned by Google, must use peer agreements to stream the videos. Google does not pay cash, it just trades some of its massive extra fiber capability in exchange for the use the internet tubes of Comcast, Verizon or whomever.
Most peering agreement are like that, but sometimes cash is involved. I guess Level 3 does not have much fiber to trade with?
So I said Comcast was picking the wrong battle. The internet bandwidth
is finite due to the technology choices already made here in the US. In high density Korea and Japan they have 10x the bandwidth for 1/10th the price?
After the net neutrality win, the ISPs will be jacking prices for consumers everywhere they get bandwidth limited during prime time. So the ISPs lose the battle with Lvl3, and turn around and say we told you so,
rates increase now.
As far as a free internet is concerned, people keep trying, the wireless experiment in Portland was DOA. Maybe we will get another chance.
In the meantime we already pay more for cable than for water or sewer or gas, and 60 percent as much as electricity. I can’t wait for the water, sewer and gas to be free.
I fired Comcast.
I’m much happier with Qwest DSL. The same sort of package discounts are available with Qwest, and I never have to deal with Comcast xSoviet Bureaucracy customer service again.
I started Netflix and Pandora after I fired Comcast. Add in hulu.com and only thing I’m missing from Comcast is Blazers game. Poor Greg Oden made me look even smarter on that.
You can sign some petition, or you can file an actual Comment on the FCC website. http://fjallfoss.fcc.gov/ecfs/hotdocket/list While you’re there, take a moment to also oppose the Comcast/NBC merger.
My Comment:
It has come to my attention that the noted antitrust violator Comcast is once again abusing its monopoly power. Today, it began charging a competitor – Netflix – higher fees for bandwidth usage. At the same time, it is hiding the fact that it operates an identical movie-download service in its “Comcast Store” for which it charges no fees. There can be no stronger evidence that the People need unfettered, unmetered, unbiased access to the new marketplace of ideas and commerce that is today’s Internet.
And Verizon, with its own movie service, will be doing the same thing if you let Comcast get away with it.
This is the same lawless entity that has an HSR review before you and the DOJ trying to integrate vertically via its acquisition of NBC Universal – reducing competition at many levels of media production and delivery, and abusing its competitors through its control of the “last mile.” I won’t even mention how they plan to suffocate journalistic integrity and political dissent once they own NBC and MSNBC.
These are the same arrogant monopolists who have been relying on a loophole to deny satellite-TV access to local sports broadcasts in the nation’s 5th largest market.
Thses are the same market gorillas who drove start-up competitor RCN out of the local cable market through predatory pricing practices never even investigated by the DOJ.
They abuse their customers with forced digital “conversions” and reduced channel options and deceptive introductory pricing scams.
They even abuse their shareholders with the continuation of dual shareholder classes, that benefits ONLY the Roberts family.
Is the FCC once again going to acquiesce meekly to the political power of this media giant? How long does Brian Roberts get to thumb his nose at the very concept of a Nation of Laws? Do you really think this is the kind of company that can be trusted to provide internet access on a fair and open basis? This new generation of robber barons MUST be regulated.
This administration has caved on everything else, no reason to think they’ll man up on this one.
Peering agreements of the type that existed between Comcast and Level3 are extremely common between both traditional telephone companies and between Internet service providers.
The general basis for a peering agreement is that two companies have roughly equal amounts of traffic that they wish to send each other. For telephone service this would typically be “voice minutes” and for ISPs this would be megabytes of data. The peering agreement will probably allow for some variability in the amount of traffic that one party sends the other as long as there is not any gross imbalance.
When the situation is such that one party (Level3) is sending disproportionately more traffic to the other party (Comcast) than the other party is sending back, then the basis for the peering agreement is broken. At that point either the agreement itself needs to be renegotiated or the party sending the excess traffic needs to pay the receiving party to handle that excess traffic.
Level3 has massively increased the amount of traffic they are sending Comcast due to Level3′s having taken on Netflix’s business. Their traffic sharing arrangement, which forms the basis for the peering agreement is no longer equitable. And Level3 knows this. This is and has been standard operating practice in these industries for decades. It doesn’t matter whether the excess traffic is a result of Level3′s Netflix business, whether it was outside traffic that Level3 was just passing through or whether it was organically originated from Level3′s pre-existing customer base. The excess traffic that Level3 is sending is a fundamental abrogation of their obligations under their peering agreement with Comcast.
For those commenters that posit that Comcast’s customers have already paid for Level3′s/Netflix’s traffic, well, they haven’t. They’ve paid for their connections to Comcast’s network and for access to the broader Internet (beyond Comcast) to the degree that Comcast has negotiated the necessary agreements and put the physical network in place to access the broader Internet.
Furthermore I don’t believe there are any Net Neutrality arguments to be made regarding the situation between Level3 and Comcast. Comcast is not attempting to charge Level3 additional fees for prioritizing their traffic. Nor are they attempting to charge additional fees based on making a technical inspection of the type of data being sent. They are merely trying to make up for the huge disparity in “traffic” that Level3 is asking Comcast to handle versus the much smaller amount that Comcast is asking Level3 to handle.
Full Disclosure:
1) I’m no fan of Comcast. We switched from Comcast to Verizon FIOS in this house due to the really crappy performance of the Comcast network.
2) I have a long history of employment working for a variety of telephone, cable and Internet service companies in both technical and executive management capacities. I’ve not worked for either Comcast or Level3 nor do I have any monetary interest in either of those companies.
3) For those that care, the relevant companies I have worked for are; Cable and Wireless, Erol’s Internet, RCN and Arbinet-TheXchange.
I realize that you are talking from a background of the business ins and outs, but I think that this actually raises a different question.
Is the increased traffic straining the peer agreement between Level 3 and Comcast driven by Level 3 or by Comcast customers using services that are delivered by Level 3. Or let me put it another way is the increase beyond the peer agreement because say Verizon Fios customers go through Comcast to get to Level 3 for their Netflix, or is it just Comcast users accessing Netflix?
If Comcast is a conduit betweent Level 3 and another ISP then you, and Comcast, have a point – the traffic is being driven by Level 3 (and the other ISPs). Call me wild or crazy, if it is demand from Comcast customers, Comcast needs to suck it up and deal. At that point the customers have paid for the service and the peer agreement is being broken not by Level 3 but by Comcast who must use more of Level 3s service.
A simple analogy for the peering agreement is – I’ll carry a gallon of water for you if you carry a gallon of water for me. Now Level3 wants Comcast to carry, say, 3 gallons of water for it while they only continue to carry a gallon of water for Comcast.
As to whether this arrangement is in Comcast’s interest or not depends on whether, as you point out, the traffic is of interest to Comcast’s customers. Whether that additional traffic help Comcast attracts or retain customers and whether Comcast has alternative sources for the same content.
At this point while Netflix does to some degree compete with Comcast’s cable subscription business and their Xfinity business, they are more an irritant than a threat. Netflix is far from being able to deliver the breadth of content that the cable companies in general can deliver. The cable companies already have access to the widest selection of content and more importantly have the physical connection to the customer to be able to deliver it. Netflix’s only advantage is that they have an established streaming video platform in place. But that has only been in place for a short period of time and is something that can be bought by the cable companies rather than having to be extensively developed.
So, If I’m a cable company executive (which I’m not) do I worry about trying to specifically impede Netflix when I have the immediate advantages of more content, a larger customer base and a direct connection with the customers (translating to better performance – even without any discriminatory traffic prioritization) and only have the short term issue of establishing my own streaming video platform to worry about? Probably not. I would have enough issues to worry about rather than getting entangled in a legal and regulatory mess that’s already been a rather public issue attracting the attention of both the FCC and Congress.
In fact, Netflix is doing the cable companies a favor. They’re busy establishing Internet streaming video as a viable market both from a technical perspective and a customer perspective while not being in a position to hold on to the market. Additionally Netflix is helping to lower the cable companies long term operating costs as they will be able to dispense with their cable tuner boxes and head-end and other cable specific physical plant and go entirely to just an Internet transport mechanism for offering their services.
So, back to the original issue. Is this a net-neutrality issue or just a contract issue. I’ll continue to argue that it is just a contract issue and one where Comcast would act the same way if the same situation (excess traffic) arose with any other of their peering partners regardless of what the traffic was.
Your point about Comcast sucking it up to deliver content that their customers are consuming may have a more relevant case and that is with Google search. A few years back the telcos and cable companies were trying to argue that they should be able to charge Google extra for delivering Google’s search content to their customers. A completely bogus argument because Google was already paying these companies for Internet connectivity as a normal customer. Google’s traffic since then has grown by orders of magnitude with the addition of Youtube. The noise about charging Google extra for delivering their content has gone nowhere.
In essence, Comcast is only asking Level3 to do the same thing that Google is doing – pay for the Internet access as a normal customer (actually I think they are getting preferred rates) for the excess traffic they are sending.
corporate sodomy
Comcast aka Scumcast!