Level 3's spat with Comcast over fees for bandwidth traffic will be looked into by the Federal Communications Commission.
Level 3 Communications has accused U.S.
cable provider Comcast Communications of imposing an unfair fee on bandwidth
traffic. As a provider of fiber-based communications services, Level 3 helps
stream Netflix's television shows and movies to consumers. Now U.S.
regulators are getting involved.
"On November 19,
2010, Comcast informed Level 3 that, for the first time, it will
demand a recurring fee from Level 3 to transmit Internet online movies and
other content to Comcast's customers," John Ryan, assistant chief legal
officer for Legal 3, wrote
in a Nov. 30 statement
. "By taking this action, Comcast is effectively
putting up a toll booth at the borders of its broadband Internet access
Level 3 claims it agreed to Comcast's demands "under protest," but
nonetheless decided to take the issue public. "Comcast is preventing
competing content from ever being delivered to Comcast's subscribers at all,
unless Comcast's unilaterally determined toll is paid," Ryan added. "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."
For its part, Comcast is framing the dispute as money-related. "The
bottom line is that Level 3 is trying to be opportunistic and change the regime
that has long been in place for this type of commercial arrangement," a
Comcast spokesperson told The Wall Street Journal Nov. 30
In any case, the Federal Communications Commission is investigating the
matter. "We're looking into it," FCC chairman Julius Genachowski said
a Nov. 30 press conference
Comcast has been previously faced with net-neutrality violations. In August
FCC ordered the cable provider to stop secretly degrading network traffic
It further asked the provider to disclose to the agency the full extent of its
traffic practices and keep the public informed of its future network-management
plans. However, the U.S. Court of Appeals for the District of Columbia Circuit
later threw out the FCC's decision, in the process derailing many of the agency's
FCC has scheduled a Dec. 21 meeting over net neutrality
, with speculation
that the agency intends to vote on whether it can regulate Internet service
providers who attempt to restrict users' access to certain Websites and
services. "The signals out there seem to be [that] they are, in fact,
contemplating a vote in December," Jeffrey Silva, an analyst with Medley
Global Advisors, told
Reuters Nov. 24
. "The situation's very fluid at the present time, and
I think they're carefully considering the message they've received from Capitol
Hill and trying to figure out their next step."
A Congressional bill aiming to regulate Internet providers collapsed in
September, ahead of the midterm elections. That legislation lacked support from
Republicans, said Sen. Harry Waxman, D-Calif., chairman of the House Energy and
Commerce Committee, but would have curbed the FCC's ability to enforce
guidelines on Internet providers after two years.