UPDATED 10:18 EST / NOVEMBER 30 2010

Comcast-Level 3: Net Neutrality the New “Fire in a Movie Theater”

It seems like every time there is a problem between business relationships in the telecom world these days, one side screams “Net Neutrality” and the blogosphere, twitterverse and news media go bananas.  It’s like screaming fire in a movie theater, or yelling bomb in an airport, or even playing the race card in some hotly debated political issue.image

Level 3 has essentially done just this with Comcast.  A section from the linked article reads,

The dispute centers on the issue of network neutrality, the idea that Internet networks should remain free from pricing or network discrimination.

Wasn’t Net Neutrality was just about how packets were sent compared to other packets and that they should all be equal?  Now it’s about pricing in contract disputes too?  How convenient for Level 3.

On top of this, we have the usual suspects coming out of the woodwork.  Free Press’ Tim Wu tweeted that,

The cable industry’s interest in destroying or taxing Netflix is obvious to anyone who thinks about it for more than 5 minutes.

OK, that may be the case.  But all industries charge a toll to those that use their roads so to say, right?  If someone dumped a bunch of packages in Wu’s car every day and had him drive them to their delivery destinations, at some point wouldn’t Wu be asking for gas money?  Surely Wu would not continue to make those deliveries simply out of the goodness of his heart, for free, for “openness”?

Tim Karr chided as well that,

Comcast displays all the telltale signs of an abusive monopoly: extorting competitors, stifling innovation and gouging consumers.image

Here are two companies that have previously made a deal for X traffic.  Level 3 now wants X + Y traffic for the cost of X dollars.  If Mr. Karr goes to McDonald’s tomorrow and asks for the Big Mac at the cost of a $0.59 hamburger, does anyone think he would receive the Big Mac?  Comcast is not an “abusive monopoly” because they are attempting to get paid for the services they offer in a fair manner.

The bottom line is that Level 3 beat out Akamai as Netflix’s new best friend and now all of the sudden Level 3 has double the traffic that they are about to drop on Comcast.  Comcast wants more money, and they are going to have to reach an agreement.  This is a business relationship that is in the midst of a contract dispute and Level 3 is trying to use media attention on a hot button issue to pressure Comcast into reducing their rates or accepting more traffic for free.  There is no fire in the movie theater, there is no bomb at the airport, this has nothing to do with Net Neutrality.

 

[Cross-posted at Digital Society]


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