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Comcast has asked Internet backbone provider Level 3 Communications to pay a "recurring fee" for transmitting movies and other broadband content to Comcast customers, Level 3 said today.
"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," Thomas Stortz, chief legal officer of Level 3, said in a statement. "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."
The news comes on the heels of Netflix turning to Level 3 to handle its streaming video.
But Comcast says Level 3 is being disingenuous in its portrayal of what is a typical network peering negotiation between two network providers.
"Level 3 has misportrayed the commercial negotiations between it and Comcast," Joe Waz, Comcast's senior vice president for external affairs, said in a statement. "This has nothing to do with Level 3's desire to distribute different types of network traffic. Comcast has long established and mutually acceptable commercial arrangements with Level 3's Content Delivery Network (CDN) competitors in delivering the same types of traffic to our customers."
Comcast informed Level 3 of the fee demand on November 19, and Level 3 agreed "under protest" on November 22 to avoid any disruption in service for customers, Level 3 said.
Comcast's move violates the "spirit and letter "of the FCC's proposed Internet Policy principles and other regulations and statutes, as well as statements Comcast has made previously about favoring an open Internet, Stortz said.
The Comcast move illustrates the risk of a "closed" Internet, "where a retail broadband Internet access provider decides whether and how their subscribers interact with content," the statement said.
Level 3 executives are asking Comcast to reconsider its position and are approaching regulators and policymakers, asking them to take action to "ensure that a fair, open, and innovative Internet does not become a closed network controlled by a few institutions with dominant market power that have the means, motive, and opportunity to economically discriminate between favored and disfavored content," the company said.
A call to Level 3 for additional comment was not immediately returned.
Comcast said the arrangement it is working out with Level 3 is similar to ones it has proposed to other commercial partners. And Comcast said Level 3 itself has endorsed similar commercial arrangements with its partners. Comcast said it's meeting with Level 3 later this week to work out the details of its arrangement.
Meanwhile, two public interest organizations said the move was a blatant violation of Net neutrality provisions.
"Comcast's request of payment in exchange for content transmission is yet another example of why citizens need strong, effective network neutrality rules that include a ban on such 'paid prioritization' practices," said Andrew Jay Schwartzman, senior vice president and policy director of the nonprofit law firm Media Access Project. "It is also yet another clear demonstration of why Comcast should not be permitted to acquire NBC Universal, given its clear tendency to exercise control in the video marketplace."
"This is exactly the sort of anticompetitive harm that opponents of Comcast's merger with NBC-Universal have warned would happen--that Comcast would leverage its network to harm distribution of competitive video services, while raising prices on its own customers," said Harold Feld, legal director of Public Knowledge. "Policymakers should see this as the third strike for Comcast, following the BitTorrent complaint, the complaint by Zoom modem manufacturers over treatment of their products, and now this."
Level 3's complaint comes as the Net neutrality issue is bubbling to a head at the Federal Communications Commission. The FCC, which has been promising to make Net neutrality rules official regulation for more than a year, is expected to lay out its final plan for those rules next month at its December open meeting.
Last September, FCC Chairman Julius Genachowski proposed making four of the Net neutrality principles official regulation. He also proposed adding two new principles.
It is these original four principles that Level 3 accuses Comcast of violating. The existing principles can be summarized this way: Network operators cannot prevent users from accessing lawful Internet content, applications, and services of their choice, nor can they prohibit users from attaching nonharmful devices to the network.
The additional principles, which the FCC hopes to make part of the regulation, would prevent Internet access providers from discriminating against specific Internet content or applications, while allowing for reasonable network management. The second principle would ensure that Internet access providers are transparent about the network management practices they implement.
It's unclear what type of action Level 3 expects the FCC to take, since the FCC's authority to enforce these principles has already been called into question by a federal court.
In 2008 the FCC gave Comcast a slap on the wrist for violating its principles when the company throttled Bit Torrent traffic on its network. Earlier this year, a U.S. appeals court threw out the FCC ruling. Judges in the case said that the FCC had no authority to regulate an Internet provider's network management practices.
(CNET's Maggie Reardon and Greg Sandoval contributed to this report.)
Updated 4:42 p.m. PST with background and reaction.
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"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," Thomas Stortz, chief legal officer of Level 3, said in a statement. "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."
The news comes on the heels of Netflix turning to Level 3 to handle its streaming video.
But Comcast says Level 3 is being disingenuous in its portrayal of what is a typical network peering negotiation between two network providers.
"Level 3 has misportrayed the commercial negotiations between it and Comcast," Joe Waz, Comcast's senior vice president for external affairs, said in a statement. "This has nothing to do with Level 3's desire to distribute different types of network traffic. Comcast has long established and mutually acceptable commercial arrangements with Level 3's Content Delivery Network (CDN) competitors in delivering the same types of traffic to our customers."
Comcast informed Level 3 of the fee demand on November 19, and Level 3 agreed "under protest" on November 22 to avoid any disruption in service for customers, Level 3 said.
Comcast's move violates the "spirit and letter "of the FCC's proposed Internet Policy principles and other regulations and statutes, as well as statements Comcast has made previously about favoring an open Internet, Stortz said.
The Comcast move illustrates the risk of a "closed" Internet, "where a retail broadband Internet access provider decides whether and how their subscribers interact with content," the statement said.
Level 3 executives are asking Comcast to reconsider its position and are approaching regulators and policymakers, asking them to take action to "ensure that a fair, open, and innovative Internet does not become a closed network controlled by a few institutions with dominant market power that have the means, motive, and opportunity to economically discriminate between favored and disfavored content," the company said.
A call to Level 3 for additional comment was not immediately returned.
Comcast said the arrangement it is working out with Level 3 is similar to ones it has proposed to other commercial partners. And Comcast said Level 3 itself has endorsed similar commercial arrangements with its partners. Comcast said it's meeting with Level 3 later this week to work out the details of its arrangement.
Meanwhile, two public interest organizations said the move was a blatant violation of Net neutrality provisions.
"Comcast's request of payment in exchange for content transmission is yet another example of why citizens need strong, effective network neutrality rules that include a ban on such 'paid prioritization' practices," said Andrew Jay Schwartzman, senior vice president and policy director of the nonprofit law firm Media Access Project. "It is also yet another clear demonstration of why Comcast should not be permitted to acquire NBC Universal, given its clear tendency to exercise control in the video marketplace."
"This is exactly the sort of anticompetitive harm that opponents of Comcast's merger with NBC-Universal have warned would happen--that Comcast would leverage its network to harm distribution of competitive video services, while raising prices on its own customers," said Harold Feld, legal director of Public Knowledge. "Policymakers should see this as the third strike for Comcast, following the BitTorrent complaint, the complaint by Zoom modem manufacturers over treatment of their products, and now this."
Level 3's complaint comes as the Net neutrality issue is bubbling to a head at the Federal Communications Commission. The FCC, which has been promising to make Net neutrality rules official regulation for more than a year, is expected to lay out its final plan for those rules next month at its December open meeting.
Last September, FCC Chairman Julius Genachowski proposed making four of the Net neutrality principles official regulation. He also proposed adding two new principles.
It is these original four principles that Level 3 accuses Comcast of violating. The existing principles can be summarized this way: Network operators cannot prevent users from accessing lawful Internet content, applications, and services of their choice, nor can they prohibit users from attaching nonharmful devices to the network.
The additional principles, which the FCC hopes to make part of the regulation, would prevent Internet access providers from discriminating against specific Internet content or applications, while allowing for reasonable network management. The second principle would ensure that Internet access providers are transparent about the network management practices they implement.
It's unclear what type of action Level 3 expects the FCC to take, since the FCC's authority to enforce these principles has already been called into question by a federal court.
In 2008 the FCC gave Comcast a slap on the wrist for violating its principles when the company throttled Bit Torrent traffic on its network. Earlier this year, a U.S. appeals court threw out the FCC ruling. Judges in the case said that the FCC had no authority to regulate an Internet provider's network management practices.
(CNET's Maggie Reardon and Greg Sandoval contributed to this report.)
Updated 4:42 p.m. PST with background and reaction.
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