November 30, 2010, 8:15 PM — Comcast and Level 3 on Tuesday stepped up their war of words over a content delivery dispute as the U.S. Federal Communications Commission also entered the fray.
Broadband backbone provider Level 3 reported on Monday that Comcast had demanded it pay a recurring fee for delivering video traffic to Comcast customers.
Level 3 won a contract recently to provide streaming video services for Netflix customers, and Comcast says it should be compensated for carrying the higher volume of Level 3 traffic over its network.
Level 3's announcement raised the alarm for net neutrality advocates, who suggested Comcast was taking a first step toward metering Internet usage based on the type of content being delivered.
In a letter filed with the FCC on Tuesday, however, Comcast argued that Level 3 is mischaracterizing the dispute, which Comcast says is actually a "good old-fashioned commercial peering dispute."
When Internet backbone providers connect to each other -- a setup known as peering -- neither party usually charges the other if the traffic they carry for each other is roughly equal, Comcast said. But Comcast says Level 3 recently asked it to set up 30 additional connection ports to support a significant amount of new traffic. That traffic would change the balance such that Comcast would be terminating five times as much traffic as Level 3 terminates for Comcast, Comcast said. As a result, following what it says are long-established peering practices, Comcast asked Level 3 to pay for the additional traffic.
Level 3 counters that Comcast is trying to divert attention from the important issue. "It is regrettable that Comcast has sought to portray this simply as a commercial disagreement or a peering dispute," John Ryan, assistant chief legal officer at Level 3, said in a statement.
"The fundamental issue is whether Comcast, as the largest cable company in the country with absolute control over access to its cable TV and broadband access subscribers, has the right to unilaterally set a 'price' for that access that effectively discriminates against competitors of Comcast's cable and Xfinity content," Ryan wrote.
The FCC, which has been considering rules that could preserve net neutrality, has taken an interest in the dispute. According to the Comcast letter, the company spoke with the FCC on Monday about the issue with Level 3.