Comcast Steals Netflix Provider Level 3’s Lunch Money

Comcast has started charging Internet backbone provider Level 3 Communications to deliver streaming Netflix services to customers. Consumerist has the story:

Here’s the deal: recently Level 3 outbid Content Delivery Network provider Akami to handle bringing streaming Neflix video.

Lacking leverage, Akami paid Comcast a traffic delivery fee. Level 3 doesn’t want to keep paying the fee. Comcast says they better pay the toll, or they can’t cross their bridge.

Comcast called Level 3’s claims “duplicitous,” saying, “Comcast has long established and mutually acceptable commercial arrangements with Level 3’s Content Delivery Network (CDN) competitors in delivering the same types of traffic to our customers. Comcast offered Level 3 the same terms it offers to Level 3’s CDN competitors for the same traffic. But Level 3 is trying to gain an unfair business advantage over its CDN competitors by claiming it’s entitled to be treated differently and trying to force Comcast to give Level 3 unlimited and highly imbalanced traffic and shift all the cost onto Comcast and its customers.”

Industry analyst Dave Burstein told Consumerist, “The Justice Department should step in with antitrust.”

So the biggest cable company in the US is charging a backbone provider a Netflix-specific fee. “Netflix accounts for more than a fifth of the traffic downloaded during the peak hours of 8 p.m. and 10 p.m. in the U.S., according to a report from broadband network company Sandvine Inc. Level 3 has said it will add capacity to its network to handle the extra load from Netflix’s movies,” writes Bloomberg. That means more “toll” money for Comcast, the salivating bully of the telecom world. More from Bloomberg:

Level 3 plans to complain to U.S. regulators who may enact so-called net-neutrality rules next month. The Federal Communications Commission is seeking to bar phone and cable providers from interfering with legal traffic on their networks. The rules are backed by President Barack Obama and companies led by Google Inc., EBay Inc. and IAC/InterActiveCorp. Phone and cable companies say rules aren’t needed and may hurt investment.

The move also comes as Comcast awaits FCC and Department of Justice approval to buy a majority stake in NBCU.

Comcast sure isn’t making many friends right now.

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Written by Drea Knufken

Currently, I create and execute content- and PR strategies for clients, including thought leadership and messaging. I also ghostwrite and produce press releases, white papers, case studies and other collateral.