Comcast demands fees for Web movie viewing, Level 3 says

IDG News Service - Comcast has demanded that broadband backbone provider Level 3 Communications pay it a recurring fee for delivering video traffic to Comcast customers, Level 3 said Monday.

Comcast said it would cut off its own customers' access to the movies and other Web traffic unless Level 3 paid the fee, Level 3 said in a press release.

The Comcast decision violates network neutrality principles that the U.S. Federal Communications Commission approved in 2005, Level 3 said. Comcast successfully challenged the FCC's enforcement of the net neutrality principles when, earlier this year, a U.S. appeals court threw out its ruling against the broadband provider slowing peer-to-peer traffic on its network.

Comcast countered by saying Level 3 has not accurately portrayed negotiations between the two companies. Level 3 is being "duplicitous" and asking for special treatment that other content delivery services don't get, said Joe Waz, Comcast's senior vice president for external affairs.

Level 3 announced Nov. 11 that it would be the primary delivery partner for streaming video service from Netflix.

Comcast informed Level 3 on Nov. 19 that it would begin charging the backbone provider for transmitting online movies and other content to Comcast customers, Thomas Stortz, Level 3's chief legal officer, said in a statement.

A week ago, "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," Stortz said in the statement.

But the negotiations with Level 3 are similar to other "long-established and mutually acceptable" commercial agreements that Comcast has with other content delivery services, Waz said in a statement.

"Comcast offered Level 3 the same terms it offers to Level 3's [content delivery] competitors for the same traffic," Waz said. "But Level 3 is trying to undercut its ... 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."

Level 3 wants to pressure Comcast into accepting "more than a twofold increase in the amount of traffic Level 3 delivers onto Comcast's network -- for free," Waz added.

Level 3 has called for commercial negotiations when network traffic between providers is out of balance, as is now the case between Level 3 and Comcast, Waz said. "We are happy to maintain a balanced, no-cost traffic exchange with Level 3," he added. "However, when one provider exploits this type of relationship by pushing the burden of massive traffic growth onto the other provider and its customers, we believe this is not fair."