Recently I put up a post regarding Comcast’s desire to charge Level3 a fee for the increased bandwidth utilization coming from their network, a direct result of the Netflix streaming service now being hosted by them. At first glance, given Comcast’s history, this looked nothing more than Comcast throwing a fit at the fact that a content service, Netflix, was possibly drawing numerous customers away from it’s overpriced cable television offerings. Recently Comcast’s SVP, Joe Waz, posted a letter that had been sent to the FCC, on their blog.
This rather lengthy letter goes into great detail, in an attempt to defend their position. However, given the severity of the situation I understand the need for its length.
When I say, “given Comcast’s history,” I mean that they have a history of treating their customers like crap. In addition to arbitrarilly raising costs for their services (with no discernible changes) they’ve even had their hand slapped for throttling different types of traffic. However, after reading over their letter and taking it with a grain of salt, I’m going to have say, I am on Comcast’s side on this one. If the situation truly is how Comcast puts it than they are not only justified in charging Level3 a fee for the increased traffic but obligated to do so as well.
Comcast’s letter refers to them as CDNs or Content Delivery Networks, and essentially any network that offers up content (just like Netflix’s instant service) falls into this category. Level3 falls into the CDN grouping now that they have the contract to host Netflix’s streaming services. Any network that connects to Comcast for any reason must agree to a peering policy, a mutual agreement between the two networks for how traffic will traverse them. In cases where a network’s traffic flowing into another will be roughly the same as traffic flowing to theirs, most often, a settlement-free peering agreement is made. Due to the traffic being about the same the two networks agree to not charge the other as it’s just easier to deal with. However, when one network’s traffic significantly overshadows the traffic generated by the other, oftentimes, this will result in the peering policy being changed to a fee, based on how much traffic is being discussed.
This type of fee based agreement is the standard when you’re talking about CDNs as they almost always exceed their partner’s traffic generation. Up to the point where Level3 and Netflix got together Level3 had a settlement-free agreement with Comcast, after the marriage, Comcast, doing as they should, asked Level3 to pay-up. It wouldn’t be fair if Comcast was charging similar CDNs a fee for admission while Level3 got in for free, this could also be seen as favoritism and quite possibly anti-competitive as Level3 would have an unfair advantage.
So, I may have been a little overzealous at first, attacking Comcast the way I did as this wasn’t (according to them) some form of anti-competitive measure. Instead it was Comcast handling Level3 like any other network that becomes a CDN, by charging them fees due to the increased cost of handling the higher bandwidth.
Having said all that brings me back to the net neutrality issue. Now the tables are turned but the issues remain. Comcast is morally right in wanting, and needing, to charge the necessary fees. Level3 needs to quit acting like a baby and pay-up, will we pay more, maybe but that’s the way it works. But let’s talk about this, say Level3 decides they’re not going to pay or as a punishment to Comcast’s users shut off their connection to Comcast. Additionally, Comcast could say, “You’re not going to pay, we’ll shut you off.” Now you’ve got a standoff with the consumer in the middle, either way they’d be unable to get access to Netflix and whomever else recides on Level3’s network and vice-versa. This is what net neutrality would be for, just because it hasn’t happened with this scenario doesn’t mean it couldn’t happen in the future.