Level 3 Communications Issues Statement Concerning Comcast's Actions

Steven Fischer sfischer1967 at gmail.com
Mon Nov 29 21:36:56 CST 2010

OK...as I was driving up and back on I-95 through Connecticut up toward
Boston, I noticed that at all the rest/gas-up stops, there was a single
restaurant - McDonalds. No Burger Kings, Wendy, etc...just McDonalds.  Now
I'm relatively certain that McD's had to pony up significant coin to be the
restaurant of choice for the I-95 corridor through Connecticut.  That
commercial agreement was made with the owners of the infrastructure (in the
case, the state of Connecticut) prior to McDonald establishing a presence on
the highway.

It would be bad form, IMO, for the state to come back to Mc'D's and say
"hey...you guys are doing a thriving business here...we want a bigger cut,
and if we don't get it, we'll barracade the exits and you'll do NO business
in these shops you've stood up.  Furthermore, we don't care if our customers
(drivers on the highway) have bought the McD's meal plan for their frequent
trips up and down the road...they can't do business here."
Comcast has essentially quarantined off part of the 'net.  The point was
made earlier - does Comcast take the same stand against Google?  Are they
going to tax Amazon (Holiday traffic, you know) for their traffic, or any
other online merchant that may not use Comcast as a primary provider?
Comcast's infrastructure is getting overrun by legitimate traffic requested
by their own customers - I'm not a NetFlix subscriber, but the way I
understand it is that the customer requests content in the form of movies
over the net - content is not arbitrarily provided by the content provider.
Instead of rasing the tarriffs for the true consumers in this case - being
their customers, they're going after the content provider.  Anti-competitive
at best.  The truth is, given today's media-rich content, Comcast can't
deliver a 15mb constant stream of traffic (or whatever it is they claim to
offer), at $19.95/month - they've made a business decision to over-subscribe
their infrastructure, and had a formula for the level to which they were
going to over-subscribe their network.  That formula either wasn't accurate
then, or didn't take into account the media-rich content that would be
delivered over the net.  Now, the second explanation really doesn't hold
water in light of the fact that Comcast also offers premium content similar
to NetFlix.  A significant portion of the Comcast subscriber base has
decided the content available from NetFlix either in content or delivery,
superior to that offered by Comcast.  So Comcast is now saying ..."wait...to
get your content to our customers, your traffic has to traverse our
backbone, therefore, we should be able to extract a tarriff for said
traffic."  But the NetFlix subscription is a fully "opt-in" model.  L3, via
NetFlix, is simply delivering the content Comcast customers have requested,
and using the Internet to delivery it.

Comcast has truly handled this all wrong...they should either a) charge
their customers a more realistic monthly fee  - one more in line with what
it takes to deliver what their level-of-service claims they offer, or b)
improve the quality and/or delivery of their premium content, or make it
more cosst-effective to their customers, so their customers don't have to go
"off-net" to get the premium content they desire.  What they did is take the
easy route, which is/was to try to get into the pockets of the successful
content provider, because their network is ill-equipped to handle their own
level-of-service claims.
On Mon, Nov 29, 2010 at 9:44 PM, Marshall Eubanks <tme at americafree.tv>wrote:

> On Nov 29, 2010, at 9:03 PM, Steven Fischer wrote:
> > Trying to follow this - so, if I have followed it correctly, L3 hosts
> high-bandwitdh services (namely NetFlix) to which an abundance of Comcast
> users subscribe?
> That is my understanding.
> >  And Comcast is crying foul, and claiming a portion of L3's revenue is
> rightfully theirs, for being "last mile" to a significant portion of the
> CDN/NetFlix customer base?
> That is my reading of these diplomatic notes.
> >  Does L3 even service a home user market, in the same vein as Comcast or
> Verizon?
> >
> Not as far as I know, although they made enough acquisitions I wouldn't be
> surprised if they had the
> odd neighborhood.
> Regards
> Marshall
> > On Mon, Nov 29, 2010 at 8:55 PM, Marshall Eubanks <tme at americafree.tv>
> wrote:
> >
> > On Nov 29, 2010, at 6:24 PM, Phil Bedard wrote:
> >
> > > Is L3 hosting content for Netflix?
> >
> > You bet.
> >
> >
> http://blogs.barrons.com/techtraderdaily/2010/11/11/level-3-signs-deal-to-be-a-primary-netflix-cdn-shares-rally/
> >
> > • NOVEMBER 11, 2010, 9:13 AM ET
> >
> > Level 3 Signs Deal To Be A Primary Netflix CDN; Shares Rally
> >
> > Regards
> > Marshall
> >
> > >  Netflix has become a large source of
> > > traffic going to end users.  L3 likely could have held out on this one
> if
> > > the content they were hosting is valuable enough to Comcast's
> customers,
> > > but maybe what Comcast was asking for wasn't much in the grand scheme
> of
> > > things.
> > >
> > > Obviously someone has to pay for the access infrastructure and Comcast
> > > would much rather get the content provider to pay for it versus passing
> it
> > > along to their customers.  I think they probably just took a stab and
> L3
> > > complied.
> > >
> > > Phil
> > >
> > >
> > >
> > > On 11/29/10 5:28 PM, "Patrick W. Gilmore" <patrick at ianai.net> wrote:
> > >
> > >> <
> http://www.marketwatch.com/story/level-3-communications-issues-statement-
> > >> concerning-comcasts-actions-2010-11-29?reflink=MW_news_stmp>
> > >>
> > >> I understand that politics is off-topic, but this policy affects
> > >> operational aspects of the 'Net.
> > >>
> > >> Just to be clear, L3 is saying content providers should not have to
> pay
> > >> to deliver content to broadband providers who have their own product
> > >> which has content as well.  I am certain all the content providers on
> > >> this list are happy to hear L3's change of heart and will be applying
> for
> > >> settlement free peering tomorrow.  (L3 wouldn't want other providers
> to
> > >> claim the Vyvx or CDN or other content services provided by L3 are
> > >> competing and L3 is putting up a "toll booth" on the Internet, would
> > >> they?)
> > >>
> > >> --
> > >> TTFN,
> > >> patrick
> > >>
> > >>
> > >
> > >
> > >
> > >
> >
> >
> >
> >
> >
> > --
> > To him who is able to keep you from falling and to present you before his
> glorious presence without fault and with great joy

To him who is able to keep you from falling and to present you before his
glorious presence without fault and with great joy

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