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Comcast allegedly demanded more money from a high internet video provider, or threatened to disconnect its customers. The move marks a bold assault on net neutrality.  (Source: CFC Oklahoma)
Legislation may stop the "toll booth" practice, though

Comcast is no stranger to controversy, with a penchant for aggressive cost saving measures.  It ran afoul of the U.S. Federal Communications Commission when it began throttling users' traffic, such as torrents or peer-to-peer connections (with regard for their legality).

Now Comcast appears to have landed itself in another mess with Level 3 Communications' Chief Legal Officer, Thomas Stortz, accusing it of demanding money in order to continue to allow Comcast customers to access Level 3's high speed video.  In essence, if true, that would represent Comcast spitting in the face of the net neutrality movement, and making a bold move towards a "toll booth" web as Level 3 puts it.

Mr. Stortz writes:

On November 19, 2010, Comcast informed Level 3 that, for the first time, it will demand a recurring fee from Level 3 to transmit Internet online movies and other content to Comcast’s customers who request such content. By taking this action, Comcast is effectively putting up a toll booth at the borders of its broadband Internet access network, enabling it to unilaterally decide how much to charge for content which competes with its own cable TV and Xfinity delivered content. This action by Comcast threatens the open Internet and is a clear abuse of the dominant control that Comcast exerts in broadband access markets as the nation’s largest cable provider.
On November 22, 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.
Level 3 operates one of several broadband backbone networks, which are part of the Internet and which independent providers of online content use to transmit movies, sports, games and other entertainment to consumers. When a Comcast customer requests such content, for example an online movie or game, Level 3 transmits the content to Comcast for delivery to consumers.
Level 3 believes Comcast’s current position violates the spirit and letter of the FCC’s proposed Internet Policy principles and other regulations and statutes, as well as Comcast’s previous public statements about favoring an open Internet.
While the network neutrality debate in Washington has focused on what actions a broadband access provider might take to filter, prioritize or manage content requested by its subscribers, Comcast’s decision goes well beyond this. 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 – even though Comcast’s subscribers requested the content. With this action, Comcast demonstrates the risk of a ‘closed’ Internet, where a retail broadband Internet access provider decides whether and how their subscribers interact with content.
It is our hope that Comcast’s senior management, for whom we have great respect, will closely consider their position on this issue and adopt an approach that will better serve Comcast and Comcast’s customers.
While Comcast’s position is regrettable, Level 3 remains open and willing to work through these issues with Comcast. However, Level 3 does not seek any ‘special deals’ or arrangements not generally available to other Internet backbone companies.
Given Comcast’s currently stated position, we are approaching regulators and policy makers and asking them to take quick action to ensure that a fair, open and innovative Internet does not become a closed network controlled by a few institutions with dominant market power that have the means, motive and opportunity to economically discriminate between favored and disfavored content.

Comcast is America's largest cable internet provider, so if Level 3's claims are indeed legitimate, net neutrality advocates -- including corporations like Google -- should be very concerned.  After all, other cable providers will likely follow in Comcast's lead.

If Comcast indeed succeeds in this bid, it would likely mean that the cost of internet services for users would greatly increase.  Advertising would no longer be enough to sustain sites like YouTube or Facebook, and they would have to switch to subscription fees.

The U.S. Congress and the FCC are working on legislation to prevent this kind of "pay to play" practice.  The pending legislation has generally enjoyed bipartisan support, though it has a few vocal critics, including Senator John McCain (R-Ariz.).



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RE: Barriers to Entry and Competition
By theArchMichael on 11/30/2010 11:34:25 AM , Rating: 3
This is exactly why I think this should have been government commissioned infrastructure built/serviced by contractors but owned by the people and leased to firms for servicing customers.
This would be the same as if I-95 was owned and built by a private company 120 years ago. In 1900 when automobile ownership and transportation were not so pervasive it wouldn't be a big deal. But, nowadays, that would have been a huge barrier to interstate commerce and development of rural areas.


RE: Barriers to Entry and Competition
By Spivonious on 11/30/2010 1:58:43 PM , Rating: 2
So you're saying that high speed internet lines should be built by private companies, funded by the public, and then leased to telcos? How is that a better deal than having the telcos build it themselves?

And building interstate highways today would be a barrier to interstate commerce and rural development? I don't follow you.


RE: Barriers to Entry and Competition
By zxern on 11/30/2010 2:43:54 PM , Rating: 2
I think you missed his key point. Yes built by private companies, but owned by the public. And that would be better as the teleco's no longer own said infrastructure.


By tastyratz on 11/30/2010 3:22:10 PM , Rating: 2
I agree and think that is an excellent idea. I would love to see the DPW pick up the infrastructure and maintain the information highway just like a regular highway. This could be considered a utility just like water, etc. I do not think they should be in the business of end user distribution/advertising/etc. but sell directly to isp's who control anything after the poll.


RE: Barriers to Entry and Competition
By zixin on 11/30/2010 4:07:45 PM , Rating: 2
No, he is saying that the internet lines should have been built, owned, and operated, and maintained by the government, thne leased to the various private companies for use.

He is also saying that if the interstate highway system is a private sector job than the cost of building a new stretch of highway to compete with the existing highway would be very expensive.


By rburnham on 11/30/2010 7:21:15 PM , Rating: 2
The idea being that none of it is owned by any one company or organization.


RE: Barriers to Entry and Competition
By theArchMichael on 11/30/2010 4:53:18 PM , Rating: 2
To explain further my analogy, I was saying that the interstate highway system is owned by the people but many private contractors working for the government typically maintain/expand the highways.

It was good for America in the past because rural areas and less developed states now had much faster access to goods, services and developers had more access to resources. So even though the interstate highway system is a pretty expensive social infrastructure program I think that noone would disagree that it provided and continues to provide enormous advantages to our economy and quality of life.

If the interstate highway system were owned by a private company, I think this would not be true. Think 'Standard Oil' and the railroad tycoons of the 19th century. Because Standard Oil owned the railroads they had almost complete control of the development of rural America in which they controlled access. Their modus operandi of forcing competing oil developers and business to pay exorbitant shipping fees was stifling competition, innovation and development.

It think it shouldn't really be a partisan issue because even the most fervent Republicans and Teapartyers would agree that government-funded infrastructure has typically been a boon to the American economy and our quality of life.


RE: Barriers to Entry and Competition
By Reclaimer77 on 11/30/10, Rating: 0
By JediJeb on 11/30/2010 6:35:15 PM , Rating: 2
I agree with both sides to some extent. What should have happened was the government put up the poles, cabling tunnels, ect then leased them to anyone wanting to string their wires/fiber through them. That is what keeps competition down now, if Comcast build all the cable runs out and a new company wants to run a competing line into the same town, they have to lease the poles from Comcast because it would be difficult to get permission to run a second set of poles right beside the old ones, or similar circumstances to that if you get my meaning. If the government had set the poles and let everyone who wanted to use them rent space on them for the same price then we would see more competition.

The government did enact something with utilities like this where competing power companies can now service the same area, but how many places are going to allow two sets of power lines to be run through the same neighborhood? It is like where I live AT&T had a falling out with the local power company and now they run the phone lines on a separate set of poles on the opposite side of the road from the electric lines. Looks rather stupid to have them separate now, but apparently it was cheaper for them to set their own poles than to continue to lease them from the power company.


By cmdrdredd on 11/30/2010 10:24:03 PM , Rating: 2
quote:
So you're saying that high speed internet lines should be built by private companies, funded by the public, and then leased to telcos? How is that a better deal than having the telcos build it themselves? And building interstate highways today would be a barrier to interstate commerce and rural development? I don't follow you.


Having private companies build the network so to speak and the public owning the lines, the government could lease the usage of these to any company who wants to use them. So you could have 30 different ISPs with various pricing plans and special features offering internet access on the infrastructure. The private company generates revenue from monthly access fees for tv programming and internet and the government generates some revenue from the lease of the lines. It would lead to far lower prices and better services offered. As it is, Comcast and others operate a monopoly on service in a given area. A take it or leave it approach where you can use them or have nothing (satellite internet doesn't count IMO). They also have zero incentive to upgrade the infrastructure.

About the highways it would be like this. I-95 is public, there is no tolls and you can use it as you please. If a private company owned it and put the squeeze on it charging ridiculous tolls what would you do? In some cases there is no alternative highway to get you to your destination in a timely manner so you're stuck paying for something and they can also begin to tell you what vehicles are allowed and which are not if they say so. They might say no trucks because they produce more exhaust fumes or some such nonsense.


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