Netflix video delivery partner battles Comcast over fees

Posted 02 December 2010 04:00 CET by wconeybeer

Over the past couple of weeks a battle has been brewing between Netflix content provider Level 3 Communications and Comcast surrounding negotiations over Level 3’s content delivery network (CDN) for Netflix.

Level 3 signed a contract with Netflix on November 11th to serve as the main CDN for the streaming video service. The deal involves moving the entire Netflix video library, over 20,000 titles to Level 3 servers, which is where Netflix customers will begin accessing the content in January.

According to Comcast, Level 3 recently asked for 30 additional connection ports to be set up to facilitate the increase in traffic that will result from the Netflix deal. And here’s where things start to get ugly…

Comcast also says that there is an unofficial agreement between internet backbone providers, which both Comcast and Level 3 are, that states if traffic carried for one another is nearly equal, neither company will levy a fee. Level 3’s deal with Netflix will reportedly disturb the balance that the two had, resulting in Comcast terminating five times as much traffic for Level 3. Now Comcast wants to be reimbursed for the increase.

Level 3 has not taken Comcast’s demand for money lightly. Thomas Stortz, Chief Legal Officer for Level 3 issued a press release earlier this week explaining his company’s position.

“By taking this action, 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,” Stortz claims. “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.”

Level 3 believes their request to maintain free access from Comcast is fair, “in part because this is not traffic that is transiting through Comcast’s network, but traffic that is headed for Comcast subscribers and was requested by them. Under this view, Comcast is trying to charge a content provider for the very access to content that it is selling to its own customers,” explains Nate Anderson of Ars Technica.

Comcast doesn’t quite see it that way. “We are happy to maintain a balance, no-cost traffic exchange with Level 3,” said Comcast senior vice president Joe Waz. “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.”

Now the FCC, which is scheduled to vote on Net Neutrality later this month, is being brought into the fray with a letter filed by Comcast Tuesday regarding the dispute. This issue will undoubtedly influence the rules the FCC is considering enacting to preserve equal treatment for all internet traffic.

And Netflix fans are also beginning to express their views on the situation. One group has started an online petition to let the FCC know that they oppose Comcast’s actions. “Tell the FCC: The big cable companies and telecoms will destroy our open Internet if you do not regulate strong net neutrality protections,” Declares the website for the petition.

As video streaming services increase in popularity we will likely see more debates of this nature arise between the internet’s backbone providers. The FCC’s Net Neutrality vote on December 21st will be a pivotal event to decide how these situations should be handled.


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