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Netflix Tech Partner Accuses Comcast of Putting Up ‘Toll Booth’

post #1 of 31
Thread Starter 
Netflix Tech Partner Accuses Comcast of Putting Up Toll Booth'


Level 3 Communications, a technology service provider whose clients include Netflix, is accusing broadband and cable company Comcast of threatening the open Internet by demanding a recurring fee for transmitting movies and other content to consumers. Thomas Stortz, chief legal officer for Level 3, said Comcast notified Level 3 Nov. 19 that its demand for payment was take it or leave it. Level 3 agreed to the terms, under protest. 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, Stortz said. 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. A request for comment was not immediately returned by Comcast. Level 3 operates a broadband backbone network that independent online content providers use to transmit movies, games and sporting events to consumers. When Comcast customers order content, Level 3 transmits it to Comcast for delivery.

For links and more stories visit the new Streaming Media section at HomeToys.com
post #2 of 31
Am I wrong to interpret this as a clear violation of a net neutrality policy? or maybe net neutrality is a concept only applicable to public consumers...
post #3 of 31
Quote:
Originally Posted by HopefulFred View Post

Am I wrong to interpret this as a clear violation of a net neutrality policy? or maybe net neutrality is a concept only applicable to public consumers...

It seems to me it is.
post #4 of 31
Unbelievable.
Netflix should refuse and see how many people will leave Comcast because of its inability to provide access to viable internet resource. "Initiatives" like that should be killed when they just appear. It would be clear reason to switch to another internet provider for me.
post #5 of 31
Quote:
Originally Posted by Victor View Post

Unbelievable.
Netflix should refuse and see how many people will leave Comcast because of its inability to provide access to viable internet resource. "Initiatives" like that should be killed when they just appear. It would be clear reason to switch to another internet provider for me.


I would love to switch from Comcast to some other provider... the only problem is the only other thing around is crappy DSL.

So Comcast is charging Netflix directly? Does that mean we are going to end up with another price hike from Netflix?

I understand why Comcast is doing this, many customers don't want or need the cable service since they have streaming options. I only purchase Internet services from Comcast, no TV, no phone. Netflix is the only service provider with reasonable rates. Comcast costs $70 a month for Internet, AT&T costs around $200 a month for two phones and Netflix is still less than $20 a month.
post #6 of 31
So Comcast wants to double charge us consumers! I already pay Comcast for content through their internet broadband.

This is nothing more then Comcast going a round about way to jack up rates.
post #7 of 31
Quote:
Originally Posted by ComputerCowboy View Post

I would love to switch from Comcast to some other provider... the only problem is the only other thing around is crappy DSL.

So Comcast is charging Netflix directly? Does that mean we are going to end up with another price hike from Netflix?

I just got an email a few days ago from Netflix stating they were raising their monthly subscription prices by a buck or two. But they are also going to offer an instant streaming sub only (no physical discs mailed) for half that cost.
post #8 of 31
Its easy to jump on comcast for this one, but after I looked into it more, i dont think thats the case. This issue is alot more complicated then these news headlines are letting on.


Level 3 and Comcast have had a peering agreement. This essentially means that they share each others pipes in order for both of their customers to get the smoothest online experience. With the levels of traffic in the past, this was a roughly equal sharing agreement. Level 3 - on average - carried the same amount of data for Comcast as Comcast carried for Level 3. This does not include data traveling from Level 3's network to users on Concasts Network and vice versa. It only includes pipe cross-national (and in some cases international) pipe sharing.

So something must be different now.

Netflix signed on with Level 3 for all their bandwidth needs. Seeing that Netflix now uses roughly 25% of the worlds domestic internet bandwidth, this dramatically increased Level 3's traffic usage, and tipped the scales on the peering agreement with Comcast. Suddenly Comcast was carrying much more of Level 3's data than Level 3 was carrying for Comcast. Again, this does not include data originating from Netflix and going to home Comcast users, but simply the sharing of their large long distance pipes.

Comcast thought this wasn't fair, and demanded that Level 3 pay for the difference in bandwidth usage in the sharing agreement. Seems reasonable enough.


So yeah, this isnt about blocking Netflix or charging the consumer something more to access such services. It seems to me that its an attempt by L3 to co-op the Net Neutrality fever to use against Comcast.
post #9 of 31
Quote:
Originally Posted by trooper11 View Post

So yeah, this isnt about blocking Netflix or charging the consumer something more to access such services. It seems to me that its an attempt by L3 to co-op the Net Neutrality fever to use against Comcast.

I see what you're saying, but why does the article say that they want L3 to pay for the bandwidth used by streaming movies on their network? Do you figure that's creative writing or isn't it a discrimination of one kind of internet traffic over another?

For the record, I am a generally (not happy about bandwidth caps) very satisfied internet-only customer of Comcast, in a market where AT&T is the only real competition.
post #10 of 31
Quote:
Originally Posted by HopefulFred View Post

I see what you're saying, but why does the article say that they want L3 to pay for the bandwidth used by streaming movies on their network? Do you figure that's creative writing or isn't it a discrimination of one kind of internet traffic over another?

For the record, I am a generally (not happy about bandwidth caps) very satisfied internet-only customer of Comcast, in a market where AT&T is the only real competition.

well i dont see any direct quotes in the article that have Comcast saying that. it seems to me its the assumption of the journalist based on what L3 is saying.

the reason i buy that its not becuase of Netflix specifically is becuase i have a feeling comcast would be trying to renegotiate this regardless of what was causing the uptick in bandwidth L3 is pushing over Comcast's pipes. It just happens that Netflix is the source.

Comcast doesnt feel that they should take on a much bigger load on their pipes (versus what L3 takes on their pipes for Comcast) for free.
post #11 of 31
As with anything that involves more expense, the consumer will eventually feel the pain at some point on the food chain. This is likely a good indication of what the future holds .. as CATV subscriptions decline due to easy availability of streaming, the lost revenue will attempt to be made up somehow ..

Unfortunately for the consumer, the ISP's hold a pretty strong lock on that business, so there are little is any alternatives ..

And here I thought that streaming would eventually cut my cable cost ..
post #12 of 31
part of the issue is also that netflix is a direct competitor to VOD services offered by comcast, which is where the net neutrality debate picks up.

if comcast is an information service, it has no obligation to carry a competitor's data on their network, nor to essentially backstop the netflix business model by providing the means to deliver their product or service at their own expense. it's unlikely the FCC will characterize comcast as a common carrier.

Level 3 was too agressive in their pursuit of netflix's bandwidth business, without considering the implications in their peering agreements, and now they're hoping to make this a "comcast hates netflix" issue, rather than a "massive disparity in traffic sharing" issue.

analysts have been warning for weeks now, and moreso since the streaming-only option was offered, that netflix was going to hit a brick wall as soon as the cable and fiber companies realized that they were subsidizing the netflix business model with their bandwidth and infrastructure at essentially no cost to netflix or its partners.

what this means to customers is, either Level 3 eats the cost (unlikely), netflix is forced to raise their prices (also unlikely), or comcast and the other providers will not only raise their rates, but institute caps and tiered service plans (most likely), since this is what they've wanted to do for quite awhile now but could never find a scapegoat or sacrificial lamb to offer up to their subscribers as the 'enemy'.

that's my take on it, at least. they tried to convince us that torrent traffic was the enemy, but nobody bought it, and that led to the whole net neutrality discussion. now they have netflix, and that might work for them.

one way or the other, consumers will pay more at some point in this food chain.
post #13 of 31
Quote:
Originally Posted by trooper11 View Post

Seeing that Netflix now uses roughly 25% of the worlds domestic internet bandwidth

Unfortunately, whats going to end up happening is a volume cap similar to European internet plans. Prices will go down for casual surfers, and way up for high volume users.

Netflix doesnt really want this, and the carriers dont either. Even more grossly abusive, is the fact that your 5% top users are using a 30-40% share of the local traffic in an area. If not higher. Its coming, and its going to suck if you use the net for large files.
post #14 of 31
yeah this pretty much flies in the face of open/net-neutrality if I'm reading it correctly. Of course there's always more to the story, but I hope the proper authority steps in before it goes too far.
post #15 of 31
I wonder if it's time to start shorting NFLX.
post #16 of 31
Sorry Folks Net Nuetrality has been dead since April 2010... http://www.washingtonpost.com/wp-dyn...040600742.html ... look who the ruling was in favor of.

Netflix is the first target in Comcast's newest business model. Don't think for a minute this is about set top boxes vs online streaming this is about Comcast developing an entirely new market for revenue and Level 3 is the first customer.

Next Comcast will set it's sights on all those peering with them including Google, Facebook, Akamai, AT&T, Qwest, etc. If you want to peer with us, you'll pay is the model and it has nothing to do with end users.
post #17 of 31
If I'm paying Comcast for up to 250 GB of data per month, why should I have to pay again if that data comes from Netflix rather than Hulu?

The FCC really needs to deny Comcast's proposed takeover of NBC Universal.
post #18 of 31
Its time to drop COMCAST
post #19 of 31
Quote:
Originally Posted by hcben00 View Post

If you want to peer with us, you'll pay is the model and it has nothing to do with end users.

I'm afraid it will have end result costs for end users ..
post #20 of 31
Nearly every broadband connection in the US is controlled by a company that also delivers TV signals to homes. And on top of that they own a ton of media content this all adds up to a monopoly on broadband content to the consumer. Don't ever expect these companies to give up their death grip on the control of media to the home.

Useful Interent TV is nothing more then a dream.
post #21 of 31
i really dont see how this relates to Net Neutrality.

Does Net Neutrality mean that Comcast isnt allowed to be compensated for bandwidth that others push through their network? They had an agreement with L3 and then the sitaution changed.

It would be one thing if they were going after particular services, but they arent. They are going after L3 becuase thier bandwidth needs over Comcast's pipes has gone way up. The conspiracy theory that this is a shot against Netflix could be true of course, but i dont see why Comcast would care why L3 is using more bandwidth, simply that it is. Its awfully convinient for L3 to cry foul and try to spin it as Comcast going after Netflix.
post #22 of 31
Quote:
Originally Posted by Bob Hetherington View Post

Netflix Tech Partner Accuses Comcast of Putting Up Toll Booth'
Level 3 Communications, a technology service provider whose clients include Netflix, is accusing broadband and cable company Comcast of threatening the open Internet by demanding a recurring fee for transmitting movies and other content to consumers.

The issue is the way this is worded. The impression it gives is that the contract between Level 3 and Comcast imposes fees specifically for transmitting movies. I suspect that was the intention of the author (though the phrase "movies and other content" is actually non-specific), but we don't have the contract here to review. There's a lot we don't know about, but I think you're probably right that it's simply a renegotiation to account for increased usage of Comcast's hardware by Level 3.

I wonder how this contract compares to others Comcast may have with companies who don't specialize in on-demand video. If it's in line with other contracts, it would seem to me that this publicity is the result of PR tactics by Level 3 to push Comcast around. On the other hand, Level 3 may be calling foul on abuse from Comcast - we have no frame of reference.
post #23 of 31
What do you guys think of last night's message from the FCC Chief?

The April Appeal court ruling, mentioned earlier on this thread, is also noted in the news.

Sounds like in the end, the consumers may have to pay more for higher Internet data traffic just like cell phone data plans.

Thanks.
post #24 of 31
Level 3 was the first company to charge a peer for this when they blackmailed Cogent years ago for the exact same thing.

Serves them right to get what they gave.
post #25 of 31
This article and thread are perfect examples of the problem with "Net Neutrality". It is a bogus term that means whatever you want it to mean. One person thinks it means one thing, one company uses it to mean another. It means nothing. It can't be defined technically, or legally.

It is all just media spin.... Don't let people snow you by referencing this term, if you see at article claiming to talk about Net Neutrality, just ignore it.
post #26 of 31
Quote:
Originally Posted by trooper11 View Post

i really dont see how this relates to Net Neutrality.

Does Net Neutrality mean that Comcast isnt allowed to be compensated for bandwidth that others push through their network? They had an agreement with L3 and then the sitaution changed.

It would be one thing if they were going after particular services, but they arent. They are going after L3 becuase thier bandwidth needs over Comcast's pipes has gone way up. The conspiracy theory that this is a shot against Netflix could be true of course, but i dont see why Comcast would care why L3 is using more bandwidth, simply that it is. Its awfully convinient for L3 to cry foul and try to spin it as Comcast going after Netflix.

Should Comcast be compensated for using their network? Sure.

But the Net Neutrality comes into play when they want to dictate what types of data gets priority on their network. Not allowing/or lowering the speed of video or torrenting traffic, etc. is what people are upset about. Comcast is about basically tell you what you can or can't do on the Internet (if you are a Comcast customer). Without Net Neutrality, they may give priority to its partners sites, which stifles their competitors (anti-competitive). Imagine if Comcast was partners with Microsoft and MS asked them to push Bing. Comcast could throttle Google, Yahoo, etc. to make them unusable and you would probably end up using Bing.
post #27 of 31
Quote:
Originally Posted by trooper11 View Post

Does Net Neutrality mean that Comcast isnt allowed to be compensated for bandwidth that others push through their network? They had an agreement with L3 and then the sitaution changed.

This isn't about traffic going *thru* Comcast's network (transit) it's about traffic that Comcast's own customers (us) are requesting.

The analogy would be for the guy who owns all the big apartment buildings in town deciding, say right around the Cyber Monday shopping rush, that they're going to charge UPS (or FedEx, or USPS) to deliver packages to the residents. The residents are already paying the Apartment to maintain their mailbox, and the doors and sidewalks to get there, and Amazon is already paying UPS to deliver the package, but not the Apartment wants a cut.

The residents don't have much option other than to Move.
post #28 of 31
post #29 of 31
Quote:
Originally Posted by Bob Hetherington View Post

Netflix Tech Partner Accuses Comcast of Putting Up Toll Booth'


Level 3 Communications, a technology service provider whose clients include Netflix, is accusing broadband and cable company Comcast of threatening the open Internet by demanding a recurring fee for transmitting movies and other content to consumers. Thomas Stortz, chief legal officer for Level 3, said Comcast notified Level 3 Nov. 19 that its demand for payment was take it or leave it. Level 3 agreed to the terms, under protest. 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, Stortz said. 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. A request for comment was not immediately returned by Comcast. Level 3 operates a broadband backbone network that independent online content providers use to transmit movies, games and sporting events to consumers. When Comcast customers order content, Level 3 transmits it to Comcast for delivery.

For links and more stories visit the new Streaming Media section at HomeToys.com/coupons

This is so ridiculous. Cable companies just look for every which way to nickel and dime people. Believe it or not there is actually a limit to how much can be downloaded in a given month on a high speed internet connection. It's very high so nobody ever hits it but we should be able to use that freely until it is up.
post #30 of 31
I need to read up on this more. I really like my Comcast internet service even though I pay very high rates. IT is fast, trouble free and when I do have a problem I have an account executive I call and it gets fixed fast! But this kind of thing really bothers me in that I use Comcast as my ISP for Netflix and other streaming services. I hope they don't start throttling or begin to charge me based on what streaming I do. Problem is, I don't have an alternative here that has the performance of Comcast.
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