updated 11:15 am EST, Fri December 3, 2010
Level 3 denies Comcast's peering claims
Level 3 today rejected Comcast's denials in a video access dispute with a new FAQ. The network provider directly accused Comcast of lying about the nature of the fight and said it was a basic interconnection issue between the two rather than a "peering dispute" as Comcast had argued. Without a basic connection deal, Level 3 would have no way of getting content to Comcast users even by rerouting it, the company said.
The complainant instead turned Comcast's argument on its head and argued that Comcast was the one hoping to "change the rules of the game." No other Internet provider in the US was charging Level 3 as much as Comcast, according to the FAQ. Level 3 insisted that Comcast was effectively 'double dipping,' or trying to charge again for access after it was already factored into a subscriber's bill.
More of the accusations charged Comcast with attempting to spin the inherent nature of the Internet and of having ulterior motives. Internet access was always disproportionately balanced, Level 3 said; it requires only a small amount of traffic to request much larger content. Comcast's attempt to make this sound inherently unfair would conveniently let it charge every backbone provider, since all of them supply video.
Level 3 went so far as to level monopolist charges against Comcast and noted that most customers had at best a duopoly to choose from; cellular wasn't at the stage where it could replace wired, it said. The firm rejected the notion it was about Netflix's deal to get content from Level 3 and noted that, if Comcast was right, companies would hesitate to develop competing services because Comcast could simply hike access prices to keep them out. It has an obvious vested interest in shielding its cable TV business.
"In addition to simply extracting monopoly profits, Comcast also has a strong motive to discourage competition with its cable TV service," Level 3 wrote. "Online distribution of movies, TV shows and other content threatens Comcast's traditional 'closed' video distribution model. While Comcast disputes that the threat exists, press reports highlighting 'cable cord cutting' (terminating cable television subscriptions and instead getting entertainment content online) confirm it is real. One industry analyst reports that about half of the content consumed by 18 to 24 year olds is downloaded over the Internet and is not delivered by cable or broadcast TV. Many parents with teenagers are intimately familiar with this trend."
The firm wrapped up by further insisting that Comcast had lied about Level 3's 'surprise' decision to make it a public issue. Level 3 had warned Comcast about going public and turning to the FCC well in advance, the company said. It purportedly went so far as to volunteer to use some of its fiber and equipment to help offset worries about bandwidth, gestures which Comcast shot down with its ultimatum.
Concerns have persisted about the sincerity of Level 3's argument, as its Netflix deal makes it both a content provider and a backbone provider. Most backbone providers aren't in similar positions. If accurate, however, the expanded Level 3 claims would have Comcast directly violating some existing if non-binding FCC guidelines and would directly run afoul of proposed net neutrality rules that prevent unreasonable discrimination against specific companies or types of traffic. It might also jeopardize Comcast's plans to merge with NBC, which had already raised alarms after the cable service said it should be allow to withhold video, possibly shutting out Netflix, iTunes and others that jeopardized its TV deals.