Level 3 Communications Challenges Comcast on "Net Neutrality"

November 30 2010, 1:00 PM

Here's a strange question in the high-flying world of Internet technology: Should Broomfield-based Level 3 Communications have to pay cable and Internet giant Comcast fees for distributing content back to Comcast customers? That's exactly what Level 3, a broadband network wholesale provider, alleges is happening when Comcast charges it for downloads that Comcast customers make of streaming movies and other content distributed across the Level 3 network. While the size of a recent fee paid by Level 3 was not made public, the company complains that it was forced to accept a "take it or leave it" demand from Comcast to avoid interruptions to its customers, writes the Denver Business Journal.

Thomas Stortz, Level 3's chief legal officer, accuses Comcast of "putting up a toll booth" at the borders of its network and influencing the cost of its competitors' online programming, a move that threatens the idea of an open Internet and represents a "clear abuse of the dominant control that Comcast exerts in broadband access markets as the nation's largest cable provider."

Joe Waz, Comcast's external affairs and public policy counsel, shoots back on Comcast's blog: "Level 3 has inaccurately portrayed the commercial negotiations between it and Comcast....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."

The Gigaom tech blog, meanwhile, wonders if Congress and regulators should intervene. "Just as in the recent retransmission fights in the pay TV world, these rumblings between giant companies leaves consumers in the lurch, even though they actually have paid for access to the Internet—that is the whole Internet, not one that is approved by Comcast or some other company. The problem, of course, is lack of competition in the broadband markets."