© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
November 30, 2010 4:51 am
Comcast has found itself at the centre of a fresh row over alleged discrimination in the way it handles video traffic on the internet, as US regulators prepare to issue “net neutrality” rules aimed at preventing internet service providers from favouring selective content online.
The US cable giant was accused late on Monday of demanding fees for the first time in return for carrying internet movies and other traffic for Level 3, an internet backbone network operator.
Level 3 accused Comcast of “effectively putting up a toll booth” on its broadband networks so that it could unilaterally set the price for online content that competes with its own services.
The Colorado-based company recently won a contract to carry video on behalf of Netflix, whose inroads into streaming movies pose a long-term challenge to Comcast’s own cable television business.
Network operators normally abide by the internet’s “peering” arrangements which were originally intended to allow competing networks to carry each other’s traffic without charge on the assumption that costs would roughly balance out.
Comcast said that there had been a doubling in the amount of traffic it was being asked to handle on behalf of Level 3, with the Netflix deal believed to account for the jump. It added that it was being asked to carry five times as much traffic for Level 3 as it sent in the other direction, which it said justified the imposition of fees.
Comcast claimed that Level 3 had “inaccurately portrayed” a normal commercial negotiation between the two companies. It also accused it of being “simply duplicitous” in trying to turn the dispute into a row about net neutrality.
The disagreement has spilled over into a public row at a sensitive time for Comcast. It is still awaiting regulatory approval for its planned acquisition of NBC Universal, which has been held up over concerns about Comcast’s outsized role in shaping the future of the video business.
Also, the US Federal Communications Commission is expected to issue net neutrality rules before Christmas that seek to prevent the sort of discrimination of which Level 3 has accused Comcast. The action has been prompted partly by a court ruling earlier this year that upheld Comcast’s right to restrict access to BitTorrent, a service often used to carry pirated movies.
Comcast moved quickly to limit the potential damage from Level 3’s accusations late on Monday, contacting regulators and Congressional representatives involved in the NBC Universal review to put forward its side of the case.
In a blog post, the cable company said that it already charged other internet backbone companies the same fees that it was seeking to apply to Level 3. It added that the fees were justified by an imbalance between the amount of internet traffic it delivered to its subscribers on behalf of Level 3, compared to the amount of traffic that passed in the other direction.
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in