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Somehow it just feels wrong to insert the words “not a” between “Comcast” and “villain”, but that actually may be the case when it comes to the cable giant’s very public dispute with Level 3 Communications. As you may recall, Level 3 has accused Comcast of charging it extra fees to carry Netflix video traffic, while Comcast is defending its actions as a reasonable response to Level 3’s unreasonable traffic demands.
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Comcast’s most recent attempt to justify its actions calls the dispute nothing more than a commercial disagreement that is fairly common in the industry. According to Comcast:

“Level 3 has low-balled its way into a new business deal [with Netflix] that will significantly increase the amount of Level 3?s traffic Comcast would carry. and suddenly wants to seriously disrupt settled economics of Internet traffic to meet its new business plan. Its position is not based on any principles of fair play on the Internet, but instead is merely the result of its rash bid to carry Netflix traffic at radically low rates, based on the flawed assumption that it could use its Tier 1 Internet backbone status to cram its CDN traffic onto others’ networks on a settlement-free basis.”

According to Comcast, then, Level 3 bit off more than it could chew when it made its content delivery deal with Netflix and expected Comcast to make up the difference without additional compensation. Level 3 then cried foul in a very public manner when Comcast tried to charge a reasonable rate for the additional traffic.

Do you believe Comcast’s side of the story, Insiders?
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Could one of the most hated companies in America actually be on the right side of an argument for once?

(via CrunchGear)

13 Responses to “Level 3 and Netflix Battle: Comcast Not the Bad Guy?”

  1. Member [Join Now]

    I don’t think we have enough details to tell, although it kills me to think that Comcast might be right

  2. Visitor [Join Now]
    Mint [visitor]

    but internet access is paid by the consumer. they pay so they could access ANYTHING efficiently. If I paid Comcast $50 a month for 6mbps connection, I should be able to get full 6mbps.

    And while Hulu charges internet provider to access the contents, Comcast want to charge the content provider for access?

    • Visitor [Join Now]
      Rick [visitor]

      That’s incorrect. That 6mbps is burst speed and is not sold as a continuious dedicated bandwidth to your house. You could not afford a 6mbps pipe to your house. Networks are sized based upon intermittent use. If everyone doubles their use, the size of the network has to double and someone has to pay for that.

      On a similar note… If Level3 expects to get paid for moving Netflix traffic across their network, why do they expect Comcast to move that same traffic for free? I assue you thet the Postal Service wasn’t delivering that content for free. Netflix is trying to shift their delivery cost to Comcast and Comcast isn’t buying it. I don’t blame them. Do you think that FedX and UPS should start delivering products for free too?

      • Member [Join Now]

        You have a flawed logic, when the postal service started carrying Netflix discs did the carriers, most of which are private contractors, get paid more?

        • Visitor [Join Now]
          Rick [visitor]

          You don’t believe that the USPO was being paid to deliver those DVDs?

          Can you name another business where the business can force others to deliver its products for free?

  3. Visitor [Join Now]
    Jimbo [visitor]

    Comcast wants to charge twice for the same content. That is wrong. However, higher bandwith users should pay more than the casual user. AT&T does it with their cell phone data plans. In other words the User should pay for using more bandwith. Not the provider.

    • Visitor [Join Now]
      Mike [visitor]

      True, if Comcast and other ISPs are not able to get Netflix pay for their additional bandwidth requirements, I can see them switching to a lower bandwidth limit that the average user without Netflix would use and then anyone that used over their alloted bandwidth would be an additional cost.

      All of a sudden your cheap $8 Netflix that cost you an additional $20 in ISP fees may not seem like such a great deal.

  4. Member [Join Now]

    Don’t be confused by cell phone data plans and wired ISP data plans. It makes a great deal of sense for the cell phone companies to charge more for greater data rates as bandwidth is very limited as compared to wired data. In order to support even a fraction of what people are demanding now on cell phones means an extremely costly upgrade to the infrastructure of most cell systems. This is not the case in most wired data plans. I see a definite conflict of interest in what Comcast is doing, and suspect it will only get worse if the merger with NBC is allowed.

    • Visitor [Join Now]
      Rick [visitor]

      That’s not true at all. If everyone on a wired network used even 10% of their peak bandwidth speed at the same time the network would come to it’s knees. Picture a hotel switchboard where every room picked up their phone to make a call at the same time, most of them couldn’t get through unless the hotel made a significant investment to add more lines. Like Comcast, the hotel based their phone service design on the assumption that not everyone will use all available lines at the same moment.

      Who should pay for the additional bandwidth that will be required to carry the Netflix Traffic? Level3, Netflix, Comcast, Netflix users, or should it be spread across all Comcast subribers even it is means doubling our bills to increase the capacity?

  5. Member [Join Now]

    Look, this is very simple:

    If Comcast is charging for bandwidth regardless of the content, then Comcast is right.

    If Comcast is charging based on the content, then Comcast is wrong and evil.

    I suspect the latter (since Comcast is evil for other reasons anyway), but no reports seem to be clear on this matter yet.

    • Visitor [Join Now]
      Rick [visitor]

      Comcast is charging for intermittent use of a pipe that will transfer data at up to the speed listed. You share that pipe with all of your neighbors. There is a finite amount of bandwidth in that pipe and if everyone in the neighborhood starts using it to move movies, the network capacity will have to be increased. Those are the facts. The only question is who should have to pay for expanding the capicity, the people sending the data or the people receiving the data. Comcast splitting the cost among all subscribers wouldn’t seem fair. Hopefully the people putting the increased load on the network will shoulder the cost. If they don’t, we’ve probably seen the beginning of the end for unlimited use plans.

  6. Visitor [Join Now]
    Nobody [visitor]

    Don’t attribute to villainy what can be contributed to incompetence.

    My company was expecting a 1-month gap in AT&T web service so we asked Comcast to install a line for 1 month of service. The price is cheap and they tried to convince us to be a business customer (a market they are aggressively marketing). When we asked about their service guarantees, they had no answer at all. We pay AT&T 10x what Comcast charges but when we contracted for a service guarantee they delivered – that is what business class customers expect. Comcast is jumping in to the business end without knowing what the customers want.

    It does not surprise me in the least that Comcast is late in figuring out what the customers want.

    I wonder what Comcast’s deal with is?

  7. Visitor [Join Now]
    Analyst [visitor]

    Am I the only one that was hoping for John Small and FLON to weigh in here (snicker, snicker)