Comcast charges toll on competing online video provider Netflix. (Free market fail?)

[a completely inoffensive name]

http://mediadecoder.blogs.nytimes.com/2010/11/29/netflix-partner-says-comcast-toll-threatens-online-video-delivery/

Comcast charges a toll on Level 3 Communications which works with Netflix to deliver streaming movies. Comcast has its own video streaming service competing with Netflix. Now Netflix must raise its prices and pay the extra fee or Comcast threatens to cut it off completely from Comcast customers. Don't worry, free market will solve this. Net neutrality is still a solution waiting for a problem.

EDIT: Statement from Level 3 communications. http://www.level3.com/index.cfm?pageID=491&PR=962

Key part: “Level 3 believes Comcast’s current position violates the spirit and letter of the FCC’s proposed Internet Policy principles and other regulations and statutes, as well as Comcast’s previous public statements about favoring an open Internet.

“While the network neutrality debate in Washington has focused on what actions a broadband access provider might take to filter, prioritize or manage content requested by its subscribers, Comcast’s decision goes well beyond this. With this action, Comcast is preventing competing content from ever being delivered to Comcast’s subscribers at all, unless Comcast’s unilaterally-determined toll is paid – even though Comcast’s subscribers requested the content. With this action, Comcast demonstrates the risk of a ‘closed’ Internet, where a retail broadband Internet access provider decides whether and how their subscribers interact with content."

[Don Corleone]

It might work better than you think. I've been eager for some minor act to push me past the tip-point where I would welcome the hassle incurred by dropping Comcast and finding another broad-band access provider. This may just be it.

[Vladimir]

Wait a minute...People still pay money to watch movies online???

[a completely inoffensive name]

It might work better than you think. I've been eager for some minor act to push me past the tip-point where I would welcome the hassle incurred by dropping Comcast and finding another broad-band access provider. This may just be it.

Problem is that large swaths of the country don't have multiple broad-band access providers, essentially living in a regional monopoly.

[Tuuvi]

I read an article a few months ago that said the major internet providers were working to end net neutrality. I hope it doesn't happen.

[Crazed Rabbit]

Well this moves me more towards support for some sort of regulation. Wish the article was more detailed.

CR

[Vladimir]

Well this moves me more towards support for some sort of regulation. Wish the article was more detailed.

CR

Details just confuse things. If you want regulation you'll get on it now.

[Xiahou]

Well this moves me more towards support for some sort of regulation. Wish the article was more detailed.

CREnd of the line ISPs like Comcast pay fees to Internet backbone providers like Level3 for carrying their traffic. Now, Comcast claims, Level3 is pushing more traffic onto Comcasts network than the other way around so Comcast wants to be able to charge Level3 a fee. That doesn't sound entirely unreasonable to me- but I'm interested in hearing more about it.

[Vladimir]

End of the line ISPs like Comcast pay fees to Internet backbone providers like Level3 for carrying their traffic. Now, Comcast claims, Level3 is pushing more traffic onto Comcasts network than the other way around so Comcast wants to be able to charge Level3 a fee. That doesn't sound entirely unreasonable to me- but I'm interested in hearing more about it.

See what I mean. If you want to regulate the intertubes you need to act now.

[Tellos Athenaios]

End of the line ISPs like Comcast pay fees to Internet backbone providers like Level3 for carrying their traffic. Now, Comcast claims, Level3 is pushing more traffic onto Comcasts network than the other way around so Comcast wants to be able to charge Level3 a fee. That doesn't sound entirely unreasonable to me- but I'm interested in hearing more about it.

Sounds like Comcast has a problem with grown up talking to its suppliers. :shrug: For Level3 traffic to use Comcast's hardware it implies that either Comcast idea of subnetting is so horribly broken that parts of Level 3 other clients fall under the same IP subnet in the Comcast network, (i.e. lazy staff forgot to make proper subnets); or it implies that Level3 is carrying so much traffic that Comcast's own routers advertise being cheaper nodes for such routes than the Level3 ones do. In the latter case Comcast is foolish if they seriously think they'll see long term money from it. To Level3, it is much cheaper to install additional hardware than let Comcast or other such ISPs cream their profits if this traffic is in any way significant.

[Xiahou]

Sounds like Comcast has a problem with grown up talking to its suppliers. :shrug: For Level3 traffic to use Comcast's hardware it implies that either Comcast idea of subnetting is so horribly broken that parts of Level 3 other clients fall under the same IP subnet in the Comcast network, (i.e. lazy staff forgot to make proper subnets); or it implies that Level3 is carrying so much traffic that Comcast's own routers advertise being cheaper nodes for such routes than the Level3 ones do. In the latter case Comcast is foolish if they seriously think they'll see long term money from it. To Level3, it is much cheaper to install additional hardware than let Comcast or other such ISPs cream their profits if this traffic is in any way significant.No, it's that Comcast provides connectivity to end users, while Level3 provides data from the Internet backbone itself. If you think of it like a highway, Level3 is the freeway while Comcast is the exit ramp. The two companies previously had a peerage agreement, but Comcast demanded it be renegotiated because the agreed upon traffic rations were no longer in effect. Seeing as how Level3 paid up, I'm guessing they didn't have a leg to stand on. It sounds like they're beating the "net neutrality" drum for PR, as they know it will play well.

EDIT: The more you look into this, the worse Level3 looks. Here's an article (http://news.cnet.com/8301-30686_3-20024197-266.html) with lots of background info from Cnet.

[Tellos Athenaios]

Ah Level 3 is doing more than just being a backbone provider with a CDN oriented service; effectively, it is a CDN.