Export thread
Comcast Charges Toll For Netflix Delivery
#1
Hylian
Hylian
Comcast Charges Toll For Netflix Delivery - The Consumerist
The largest broadband backbone provider in the world says Comcast has set up a tollbooth, charging it a fee to deliver Netflix content to Comcast customers. "This action by Comcast threatens the open Internet and is a clear abuse of the dominant control that Comcast exerts in broadband access," said Level 3 in a statement.
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."
"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. Payments have only been required from smaller carriers who are not truly "peers."
"In particular, Comcast's claim their charge to a backbone provider is ordinary "paid peering" is bs. The details of Comcast's claims would mean they collect a fee from every bit, especially video over the Internet unless it's sent by AT&T or Verizon. AT&T and Verizon would of course gladly collect fees for video to their customers as well."
The news is the latest salvo in the Net Neutrality battle and comes at a time when Comcast is under regulatory scrutiny the merger it is eager to make with NBC. Some, including publishers of this blog, Consumers Union, say the proposed merger would limit consumer choice and increase prices.
#2
Jiarn
Jiarn
Does Comcast ever do anything right? Just curious.
#3
Espy
Espy
Huh?
How the hell would this work? If use the Netflix app on my PS3 they would add a charge to my monthly bill?
How the hell would this work? If use the Netflix app on my PS3 they would add a charge to my monthly bill?
#4
Hylian
Hylian
They are charging Level 3 (who Netflix is using to stream us the movies) extra money every time a Comcast customer uses Netflix Instant Watch
#5
Espy
Espy
Well that seems like a terribly dangerous precedent to set.
#6
Chibibar
Chibibar
so there is a toll PER request?
that is bad precedent.
that is bad precedent.
#7
Dave
Dave
We are headed towards that frightening tier graphic that's been posted several times where you have to pay extra for things like Google or ESPN...
#8
Hylian
Hylian
We are headed towards that frightening tier graphic that's been posted several times where you have to pay extra for things like Google or ESPN...
#9
AshburnerX
AshburnerX
That's going to come down to the eventual anti-trust hearings. The first company that does it is going to get sued by everyone who isn't "standard content" for interfering with their business practices. Would YOU want to go up against Amazon, eBay, and other online retailers as a single force? That's not even including the Youtubes, Netflixes, and Valves of the world.We are headed towards that frightening tier graphic that's been posted several times where you have to pay extra for things like Google or ESPN...
#10
strawman
strawman
It's nothing like that, but it is rather complex so the reporters are trying to both make it relevant to consumers (it's not, actually) and easy to understand.
The internet is like a series of pipes.... no, wait, hold on...
tldr version:
Level 3 is clearly abusing their peering agreement with Comcast. Comcast called them on it. Level 3 immediately caved, because the agreement is very, very clear on this matter. Level 3 is raising the specter of net neutrality (which doesn't apply) and customer costs (which doesn't apply) to gain public support, probably to appease its stockholders and prop up its stock because Comcast is already seen as a bad guy. In short, it's really not a big deal, and it won't affect consumers at all in the short run, and only marginally in the long run, and it won't forced a tiered network at all.
Long version and rambling explanation:
There are a number of companies that act as the "backbone" of the internet. They provide the means to transfer bits and bytes long distances.
These companies supply internet connectivity to smaller customers, both for content providers (hosting) and consumers (John Doe).
If company A and company B each serve different regions and different customers, and each have, say, 10 million customers, then they agree to be "peers" and connect their networks without charging each other.
The basic idea is that if I, who is on the SBCGlobal network, wants to talk to halforums, which is on the HE network, then SBCGlobal and HE.net have a peering agreement. HE.net likely has consumers that use content from hosts on the SBCGlobal network, and so the traffic essentially evens out - they each send packets to the other, and receive packets from the other and deliver them all in an orderly fashion.
As long as the ratio of sent:received bits is pretty even (1:1 ideally, 1:2 or 2:1 is ok) on average, then they do not charge each other to carry the other's traffic.
However.
If HE.net starts hosting content that pushes far more packets onto my network than I'm pushing onto theirs, then they are getting a free ride.
Now, I hate a lot of comcast's policies as a general rule, but they are not completely in the wrong here.
Level 3 is not just an ISP shuttling packets for their customers. They have recently started hosting their own internal content delivery network, and selling it for significantly lower rates than would be possible if they were not getting "free" peering access to many other companies.
As a result, comcast is now facing a 1:5 ratio of traffic they push to level three vs traffic they must accept from level three.
Their peering agreement states that if the ratio becomes too large then either party can re-negotiate the deal.
Comcast has used that option, and is now requiring level3 to pay for the additional packets they are pushing onto the comcast network. Level 3 agreed to the new charges.
But they won't go down without a fight, and they are sensationalizing it. The reality is that Level 3 was hoping they could get away with it, got a lot of customers (notabley netflix) to sign up, with the hope that they wouldn't have to renegotiate peering agreements with their peers. Comcast is only the first company to call them out on it, every other peer is going to renegotiate their terms as they see their network loads shift.
To some degree it can be compared to china locking their currency with the US, and forcing a trade disparity that favors them selling their products into the US.
To some degree the matter is muddied by the fact that comcast also sells content to their customers, but it must be realized that this content is primary sold directly to their customers on their own network - not to others on Level3 networks. So while there's the smell of anticompetitive behavior, it really isn't the case until you can get a comcast cable subscription even though you are a Level3 customer, and comcast starts pushing their content packets onto their peers.
So... yeah, it's really nothing more than a minor business dispute. It will only affect customers in the fact that Level3 can't really sustain their cheap content delivery prices without advantageous peering agreements, and so they will charge them more per byte, which will be passed on to consumers. If they made a poor bet and sold multi-year agreements with their customers, it's quite possible that this change in cost will put them in the red. the fact that they caved within 2 days of notification from comcast suggests some interesting possibilities.
But your comcast rates aren't going to change, and if netflix changes their rates it won't be for another 6 months at least.
The internet is like a series of pipes.... no, wait, hold on...
tldr version:
Level 3 is clearly abusing their peering agreement with Comcast. Comcast called them on it. Level 3 immediately caved, because the agreement is very, very clear on this matter. Level 3 is raising the specter of net neutrality (which doesn't apply) and customer costs (which doesn't apply) to gain public support, probably to appease its stockholders and prop up its stock because Comcast is already seen as a bad guy. In short, it's really not a big deal, and it won't affect consumers at all in the short run, and only marginally in the long run, and it won't forced a tiered network at all.
Long version and rambling explanation:
There are a number of companies that act as the "backbone" of the internet. They provide the means to transfer bits and bytes long distances.
These companies supply internet connectivity to smaller customers, both for content providers (hosting) and consumers (John Doe).
If company A and company B each serve different regions and different customers, and each have, say, 10 million customers, then they agree to be "peers" and connect their networks without charging each other.
The basic idea is that if I, who is on the SBCGlobal network, wants to talk to halforums, which is on the HE network, then SBCGlobal and HE.net have a peering agreement. HE.net likely has consumers that use content from hosts on the SBCGlobal network, and so the traffic essentially evens out - they each send packets to the other, and receive packets from the other and deliver them all in an orderly fashion.
As long as the ratio of sent:received bits is pretty even (1:1 ideally, 1:2 or 2:1 is ok) on average, then they do not charge each other to carry the other's traffic.
However.
If HE.net starts hosting content that pushes far more packets onto my network than I'm pushing onto theirs, then they are getting a free ride.
Now, I hate a lot of comcast's policies as a general rule, but they are not completely in the wrong here.
Level 3 is not just an ISP shuttling packets for their customers. They have recently started hosting their own internal content delivery network, and selling it for significantly lower rates than would be possible if they were not getting "free" peering access to many other companies.
As a result, comcast is now facing a 1:5 ratio of traffic they push to level three vs traffic they must accept from level three.
Their peering agreement states that if the ratio becomes too large then either party can re-negotiate the deal.
Comcast has used that option, and is now requiring level3 to pay for the additional packets they are pushing onto the comcast network. Level 3 agreed to the new charges.
But they won't go down without a fight, and they are sensationalizing it. The reality is that Level 3 was hoping they could get away with it, got a lot of customers (notabley netflix) to sign up, with the hope that they wouldn't have to renegotiate peering agreements with their peers. Comcast is only the first company to call them out on it, every other peer is going to renegotiate their terms as they see their network loads shift.
To some degree it can be compared to china locking their currency with the US, and forcing a trade disparity that favors them selling their products into the US.
To some degree the matter is muddied by the fact that comcast also sells content to their customers, but it must be realized that this content is primary sold directly to their customers on their own network - not to others on Level3 networks. So while there's the smell of anticompetitive behavior, it really isn't the case until you can get a comcast cable subscription even though you are a Level3 customer, and comcast starts pushing their content packets onto their peers.
So... yeah, it's really nothing more than a minor business dispute. It will only affect customers in the fact that Level3 can't really sustain their cheap content delivery prices without advantageous peering agreements, and so they will charge them more per byte, which will be passed on to consumers. If they made a poor bet and sold multi-year agreements with their customers, it's quite possible that this change in cost will put them in the red. the fact that they caved within 2 days of notification from comcast suggests some interesting possibilities.
But your comcast rates aren't going to change, and if netflix changes their rates it won't be for another 6 months at least.
#11
Joe Johnson
Joe Johnson
Stupid voice of reason!
#12
Hylian
Hylian
Netflix cost sparks fight between Level 3, Comcast - Nov. 30, 2010
NEW YORK (CNNMoney.com) -- Netflix is clogging up the Internet. There's a debate raging about who should pay for it -- but ultimately, it's going to be you.
The latest skirmish is a fracas between Comcast, which connects users to the Internet, and Level 3, which signed a deal three weeks ago to host and deliver Netflix's streaming videos to networks like Comcast's. Comcast ultimately delivers those videos to its paying broadband customers.
Here's the quick blow-by-blow:
After Level 3 (LVLT) inked the deal, it went to Comcast and asked permission to send twice the amount of traffic to the cable and Internet provider's network as it had done before. The data spike isn't surprising: Netflix represents more than 20% of download traffic during peak hours, according to a new study by Sandvine.
Comcast (CMCSA, Fortune 500) scoffed. That's a whole lot of bandwidth that Level 3 is asking for, and it's expensive for Comcast to constantly beef up its network to support additional traffic.
Typically, content delivery networks (CDNs) like Level 3 have what's called "peering" agreements with Internet service providers (ISPs) like Comcast. The two sides figure that a roughly equal amount of traffic will be driven to each of their networks, so neither charges the other a fee for use.
But Comcast says that with the new Netflix load, Level 3's traffic to Comcast's network would be five times more than the cable company is driving to Level 3's network. So Comcast demanded that Level 3 pay for that traffic increase.
"Level 3 wants to compete with other CDNs, but pass all the costs of that business onto Comcast and Comcast's customers, instead of Level 3 and its customers," Comcast said in a blog post.
In response, Level 3 lashed out at Comcast. It called the new fee unfair and accused Comcast of abusing its "dominant" position as the nation's largest cable provider.
"By taking this action, Comcast is effectively putting up a toll booth at the borders of its broadband Internet access network," Level 3 said in a press release.
Still, it says it grudgingly agreed last week to pay up. "After being informed by Comcast that its demand for payment was 'take it or leave it,' Level 3 agreed to the terms, under protest, in order to ensure customers did not experience any disruptions," the company said.
Somebody's gotta pay
The explosion of online video -- especially the movie-length content Netflix (NFLX) spotlights -- isn't an easy problem to fix. The amount of video watched online has nearly doubled in a year, to 15.1 hours per user per month, according to comScore. It is costs increasingly more to host and serve that content, and to build the infrastructure for the bandwidth that allows users to download it.
Someone has to pay for that. But who should it be?
0:00 /5:04Netflix: DVDs dead, streaming lives
That's where it gets sticky: Both Comcast and Level 3 are playing on both sides of the fence.
In addition to being one of the world's largest CDNs, Level 3 is also a so-called "tier 1" Internet backbone. It's one of around a dozen companies that provides major routes for data to flow between networks like Comcast and content networks (including its own) that host websites and videos.
Level 3 squawked loudly about Comcast's fee demand, calling it a "clear abuse" of Comcast's market position and an act that "threatens the open Internet."
Yet Level 3 found itself in Comcast's shoes back in 2005. Feeling its peering agreement with fellow Internet backbone Cogent Communications (CCOI) unfairly taxed its network, Level 3 made the exact same argument that Comcast is making today, and even temporarily pulled the plug on its connection to Cogent, cutting off some parts of the Internet for millions of Cogent customers.
Comcast is also playing on both sides of the argument, since it is a competitor to Netflix. It owns several cable channels and is in the process of buying NBC Universal.
Level 3 played up that conflict-of-interest. "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," the company said.
Comcast denied that its role as a content provider has anything to do with its decision to charge Level 3 a fee.
'A series of tubes'
To make some sense of this, we can pay tribute to the late Sen. Ted Stevens, who famously called the Internet "a series of tubes." It's not, but it's actually a pretty good analogy.
Picture the Internet as a city. Level 3 operates the massive plumping pipes under the roadways, but it also runs the mechanism that collects and pushes the water through. Comcast is the company that connects your home plumbing system to those massive water pipes -- but it also makes some of the water.
Kind of complicated, right? So the debate isn't as clean-cut as it would appear.
Even Net neutrality advocates are backing away from the strong language they had initially used in shunning Comcast.
"The Net neutrality argument isn't saying that everything should be free -- someone needs to pay for all the infrastructure that provides that traffic," said Matt Wood, associate director of Media Access Project, an advocacy group that wants regulators to mandate "open Internet" policies.
"Netflix will have to raise its costs, because Level 3 has to raise costs to carry Netflix, and Comcast has to raise its costs to increase its bandwidth," he said. "But ultimately, that means the customers will pay for it."
It's possible that Comcast is singling out Level 3 because it serves content from one of its chief competitors. It's also possible that Level 3 is being duplicitous by changing its argument when it's on the other side of the fence.
But cutting through all the bickering, one harsh reality is becoming clear: Everyone's going to have to pay. Comcast will have to raise its fees and Level 3 will have to pay more for its traffic demands. Those fees will be borne by Netflix and Comcast -- and ultimately, they'll be passed onto you.
#13
strawman
strawman
Momma always tol' me not to bring facts into a good argument!
#14
Covar
Covar
Great overview of the situation by Ars. The situation is not clear cut for either side.
How Comcast became a toll-collecting, nuke-wielding hydra
How Comcast became a toll-collecting, nuke-wielding hydra
#15
Hailey Knight
Hailey Knight
So, unless I've heard wrong, apparently Comcast wins and will start charging us to cover the costs if we use Netflix instant?
#16
V.Bond
V.Bond
FCC: We didn't impose stricter net neutrality regulations on wireless because Android is open -- Engadget
I'd like to think that this isn't what is sounds like.
I'd like to think that this isn't what is sounds like.
#17
Piotyr
Piotyr
No, Comcast is just making Level 3 pay for the actual network bandwidth they're using.So, unless I've heard wrong, apparently Comcast wins and will start charging us to cover the costs if we use Netflix instant?
#18
Chibibar
From what I understand, Land line net (broadband and DSL etc etc) cannot be restricted in terms of services, application and data BUT They CAN restrict wireless.
So while we may not have tier network on the physical lines, we may get tier network from wireless network (which might be the next step once the full infrastructure are in place)
Chibibar
BBC News - Net neutrality rules get go ahead from US regulatorsFCC: We didn't impose stricter net neutrality regulations on wireless because Android is open -- Engadget
I'd like to think that this isn't what is sounds like.
From what I understand, Land line net (broadband and DSL etc etc) cannot be restricted in terms of services, application and data BUT They CAN restrict wireless.
So while we may not have tier network on the physical lines, we may get tier network from wireless network (which might be the next step once the full infrastructure are in place)
#19
strawman
strawman
While they can tier wireless, they can only do so if they can make a case that not doing so would result in poor performance for others.
This will be abused, of course, but they can't do it willy-nilly without some sort of explanation.
This will be abused, of course, but they can't do it willy-nilly without some sort of explanation.