Comcast Starts Online Video ‘Toll Booth,’ Netflix Supplier Says

[Homerboy]

Umm, level 3 is a much larger ISP than Comcast.

Much? If I'm not mistaken L3 is the largest is it not? Not just their physical "size" but literally by peering and routing tables? You'd be hard pressed to get anywhere on the internet without likely touching L3 or one of its subsidiary networks somewhere along the line.

 

[torpid]

Much? If I'm not mistaken L3 is the largest is it not? Not just their physical "size" but literally by peering and routing tables? You'd be hard pressed to get anywhere on the internet without likely touching L3 or one of its subsidiary networks somewhere along the line.

Then how is it possible there was ever equal traffic (especially before comcast's streaming services)? Comcast would ostensibly be predominantly a "consumer" of internet content and therefore would likely be sending wayyy less than it receives...???

 

[zokudu]

Much? If I'm not mistaken L3 is the largest is it not? Not just their physical "size" but literally by peering and routing tables? You'd be hard pressed to get anywhere on the internet without likely touching L3 or one of its subsidiary networks somewhere along the line.

And people say Comcast is evil.

 

[thescreensavers]

Fuck Comcast indeed. They screwed over TechTV as well.

It sucks that they are the only good internet provider here. ATT we can get 6mbps down which will only hit 5.5 or use Comcast that says 12 down and we always get 18+.. its a no brainer.

 

[her209]

Again, that is NOT the point. They are sending much more data into comcast's network without receiving a similar load. That is what you call a lopsided peering arrangement and ANYTIME that happens one side (the one sending much more than they are receiving) will have to pay the other. This is common.

Level 3 is sending more data into Comcast's network because of Comcast's users using Netflix. The only time Level-3 Netflix data will traverse Comcast's network to a Comcast peer is if that peer isn't also peered with Level-3.

 

[RavenSEAL]

Fuck comcast, FIOS is where it's at.

 

[her209]

Then how is it possible there was ever equal traffic (especially before comcast's streaming services)? Comcast would ostensibly be predominantly a "consumer" of internet content and therefore would likely be sending wayyy less than it receives...???

Comcast sells business connections which send more data (think servers).

 

[The Boston Dangler]

ars: How Comcast became a toll-collecting, nuke-wielding hydra

regarding cogent/level 3:

But the CDN traffic from Level 3 isn't in "transit" anywhere; it's going to the Comcast customers who want to watch Netflix movies. Level 3 is, in one sense, doing Comcast a favor by making a key Internet service better; it's not simply taking advantage of Comcast's network to get its own traffic somewhere else. That's what Werbach means when he talks about a "terminating access monopoly"; Comcast has a lock on its customers and can try to extract rents from anyone trying to send them data, even if it's data they requested.

having worked in the industry for 11 years, i offer these facts:

1. the cable industry is a non-competitive cartel

2. the cable industry's business model is dependent on customers paying for things they don't use.

3. if customers insist on using the things they paid for, there will be hell to pay.

 

[spidey07]

Good article. Hammers home the entire point.

Comcast says that this is standard practice (and that it's not singling out any particular kind of content). While it previously had a settlement-free (read: no charge) traffic peering agreement with Level 3, such agreements are typically made only between network operators who are roughly comparable in size and therefore exchange similar volumes of traffic with one another. According to Comcast, the Netflix deal means that Level 3 will soon more than double the amount of traffic it sends onto Comcast's network and that this will result in a 5:1 traffic ratio—at which point the relationship will be unbalanced, and fees will be required.

"We are happy to maintain a balance, no-cost traffic exchange with Level 3,” said Comcast senior vice president Joe Waz last night. “However, when one provider exploits this type of relationship by pushing the burden of massive traffic growth onto the other provider and its customers, we believe this is not fair.”

 

[Patranus]

I love how Comcast is being pro consumer by protecting its users from higher costs and somehow they are the evil one just because someone throws out 'net neutrality'.

 

[The Boston Dangler]

“However, when one provider exploits this type of relationship by pushing the burden of massive traffic growth onto the other provider and its customers, we believe this is not fair.”

notice how the statement implies comcast and its customers are on the same side, and are being harmed by a parasitic 3rd party. the traffic is generated by comcast's customers attempting to use the services (internet access and netflix) they have already paid for. the fact is comcast is a parasitic middle-man in this exchange. they have already been paid to be the middle-man once, and now that people call them on it, they want more.

like i said, comcast very much wants customers to not use what they have paid for. personally, what i'd like to see happen:

netflix online $10
netflix online for comcast customers $12
Q: why do you charge more for comcast customers?
A: the difference in price goes directly to comcast. we don't like it any more than you do.

 

[Crono]

I love how Comcast is being pro consumer by protecting its users from higher costs and somehow they are the evil one just because someone throws out 'net neutrality'.

They are "protecting" users from services they want.

It's not as if Level 3/Netflix is creating fake traffic. Users are streaming content from Netflix, Netflix is proving that content by way of Level 3.
They key here is that Comcast is acting as a regulator, and what's worse is that they aren't telling customers up front that's what they are doing. It might be acceptable if they actually notified customers (clearly, not by way of line 493 in fine print) of the change.

 

[Patranus]

They are "protecting" users from services they want.

It's not as if Level 3/Netflix is creating fake traffic. Users are streaming content from Netflix, Netflix is proving that content by way of Level 3.
They key here is that Comcast is acting as a regulator, and what's worse is that they aren't telling customers up front that's what they are doing. It might be acceptable if they actually notified customers (clearly, not by way of line 493 in fine print) of the change.

If Comcast didn't charge Level 3 for its doubling of data, the cost of infrastructure would be passed onto the Comcast customer. Yes, Comcast is being pro consumer in this case.

 

[The Boston Dangler]

I love how Comcast is being pro consumer by protecting its users from higher costs and somehow they are the evil one just because someone throws out 'net neutrality'.

pro-consumer? protecting users from higher costs? surely you jest. this would be an additional revenue stream, and will stop price increases. next you'll be saying prices will (are you sitting down?) decrease!

 

[xanis]

For everyone feeling confused and/or misinformed, CNET has put together a FAQ on the dispute: http://news.cnet.com/8301-30686_3-20024197-266.html

This all comes across as a giant net-neutrality evil-corporation clusterfuck, but it's actually pretty simple at its core. Here's the general gist (from what I've gathered):

1) Comcast/Level 3 have had a peering agreement for a while now. Currently, the ratio of traffic flow is 2:1 (L3:Comcast). Under the terms of their agreement, this is considered "even", and no money was exchanged between either party for this particular arrangement.

2) Netflix used to be delivered through Akamai (a CDN) but is now delivered by L3. Taking into account the increase in traffic from providing Netflix, the ratio of data flow would increase to approximately 5:1 (still L3:Comcast). This violates the terms of the peering agreement.

3) Because the traffic through Comcast's network would double, Comcast wants to charge L3 for the increased traffic.

---

Now, to address a few other things.

This does not have anything to do with net neutrality. I generally don't agree with Patranus, but he's absolutely right. For reference, the definition of net neutrality (according to Wikipedia):

Network neutrality (also net neutrality, Internet neutrality) is a principle proposed for user access networks participating in the Internet that advocates no restrictions by Internet service providers and governments on content, sites, platforms, the kinds of equipment that may be attached, and the modes of communication.

[link]

There are no restrictions being placed on anything in this situation. Comcast isn't telling Level 3 that they can't provide certain content (for whatever reason), or vice versa. Comcast is only asking that they be compensated for an increase in traffic on their networks, which would be caused by L3.

Additionally, this has absolutely NOTHING to do with Netflix or even the type of content that is being provided and passed through these networks. The issue here is the amount of TRAFFIC that is passing through the networks. Comcast is targeting the overall increase in traffic, not a specific type of traffic.

 

[sactoking]

Good article. Hammers home the entire point.

Yes, it definitely does that:

Level 3 thought it was entirely fair—in part because this is not traffic that is transiting through Comcast's network, but traffic that is headed for Comcast subscribers and was requested by them. Under this view, Comcast is trying to charge a content provider for the very access to content that it is selling to its own customers. And, of course, there's the issue that such fees could raise costs for Netflix and other Internet video providers, but won't affect Comcast's own video services such as cable TV.

"As far as I know, no primary backbone provider like Level 3 has ever been required to pay to deliver traffic to another major carrier,” says industry expert Dave Burstein. “Comcast's explanation why they should collect from Level 3 would also apply to every other backbone carrier and hence to essentially every bit carried over the Internet. Downstream traffic is about four times as high as user upstream, so even a company with a lot of users receiving packets from Comcast users would be asymmetrical."

To Burstein, Comcast's move is about shifting to a world where every bit is paid for. The problem, as he sees it, is that there's not enough competition and so the big last-mile ISPs would be in a perfect position to set unreasonably high rates, improving their own profits and blocking out competitors like online video. Why bother to block traffic, which would raise an outcry, when you can simply tax it to death in private?

"Flow through to consumer benefits would be plausible with strong competition,” Burstein tells Ars, “but with weak competition I follow almost all the money straight to carrier bottom lines."

Rob Frieden, a Penn State telecoms prof and recent author of the book Winning the Silicon Sweepstakes, has studied such issues for years. He says that Comcast's argument about this being a mere peering traffic imbalance is plausible, but he notes that the company could do plenty to adjust its own routing strategies to send more off-network traffic through the Level 3 backbone in order to make the ratios more even. But Comcast might well have an incentive not to do this, "deliberately reducing the volume of ‘return’ traffic it hands off" in order to make the imbalance even larger.

The end goal, of course, would be getting Level 3 to pay up and move away from free peering

In other words, Comcast is holding its users' eyeballs hostage, demanding payment for those who want to reach them because there's no other way to get data to those customers.

But the CDN traffic from Level 3 isn't in "transit" anywhere; it's going to the Comcast customers who want to watch Netflix movies. Level 3 is, in one sense, doing Comcast a favor by making a key Internet service better; it's not simply taking advantage of Comcast's network to get its own traffic somewhere else. That's what Werbach means when he talks about a "terminating access monopoly"; Comcast has a lock on its customers and can try to extract rents from anyone trying to send them data, even if it's data they requested.

I spoke with Public Knowledge legal director Harold Feld, who makes the same points about peering and transit. “To the best of my knowledge,” he says, “this is the first time ever a last-mile network has demanded compensation from another ISP for delivering traffic requested by a subscriber on the ‘terminating’ ISP's network.”

Peering disputes have been around for years, and have sometimes resulted in slow Internet connections as one provider yanks its direct connection to another network, but Feld says that past disputes have "involved hand off of traffic through the middle-mile to transport it from one last-mile network to another.”

In the Level 3 case, “if a last-mile ISP can charge for ‘peering’ with an end-user subscriber that requests the data, how is that different from charging Netflix directly to deliver their traffic?”

Bottom line: this isn't a simple "peering" dispute. It is instead a “demand to a content provider's ISP to pay a new fee to deliver content requested by a Comcast subscriber.” In short, it is Ed Whitacre's dream Internet.

 

[Crono]

If Comcast didn't charge Level 3 for its doubling of data, the cost of infrastructure would be passed onto the Comcast customer. Yes, Comcast is being pro consumer in this case.

They are acting as a nanny. Consumers don't need protection from price increases without their knowledge, and not when it involves limiting in any regard a service they are paying for. Which is what Comcast will do if they aren't paid more by Level 3.

They could easily give customers the option of taking a plan price hike and not have their connection limited/throttled in the future.

 

[xanis]

They are acting as a nanny. Consumers don't need protection from price increases without their knowledge, and not when it involves limiting in any regard a service they are paying for. Which is what Comcast will do if they aren't paid more by Level 3.

They could easily give customers the option of taking a plan price hike and not have their connection limited/throttled.

There is no limiting of any kind currently or potentially happening with either Comcast or L3. There is also no limiting or throttling occurring on either end. Comcast can be quoted as saying that they do not intend to restrict or stop the delivery of Netflix content to its customers.

 

[Crono]

There is no limiting of any kind currently or potentially happening with either Comcast or L3. There is also no limiting or throttling occurring on either end.

I edited my post. There isn't yet, but it's inevitable if Comcast decides they simply don't want to put up with Level 3 not paying enough, and they don't want to pass on the cost to its customers.

Yes, I realize this isn't a net neutrality issue yet, but it is heading in that direction.

 

[CZroe]

Thats cool and all but this isn't a Net Neutrality issue at all.

Bull. That's EXACTLY what it is. The "peering arrangements" are exactly the kind of thing Net Neutrality will affect and this kind of issue is exactly the kind of issue that was predicted by those calling for it.

 

[Zargon]

Yes, it definitely does that:

yes, that sounds much more like COMCAST, and the world is back in balance, as long as that is true.

 

[SaDiZTiKStyLeZ]

Comcast is mad that folks would rather watch movies provided by Netflix, instead of the crap they provide.

 

[Judgement]

Comcast has grown out of control and needs to be broken up into "baby bells" that can compete with each other.

It simply has too much power and influence with little to no protection for the consumers, and now content providers, who are forced to deal with its BS

 

[James Bond]

To everyone who thinks Comcast is the culprit here:

http://blog.ioshints.info/2010/12/internet-peering-disputes-follow-money.html

It's been said by Spidey and others: This is nothing more than Level3 trying to get a free lunch. They know that everyone hates Comcast, and the words "net neutrality" make people freak out.

 

[torpid]

To everyone who thinks Comcast is the culprit here:

http://blog.ioshints.info/2010/12/internet-peering-disputes-follow-money.html

It's been said by Spidey and others: This is nothing more than Level3 trying to get a free lunch. They know that everyone hates Comcast, and the words "net neutrality" make people freak out.

Not sure I follow the arguments in this article. It implies that netflix isn't already dumping that exact same content onto comcast's network via Akamai. How could that be true? Isn't this about comcast customers using netflix, or is comcast now the backbone route between Level 3 and some non-comcast netflix users?