Comcast Says Their Dispute With Level 3 Is “Not About Online Video” – Yeah Right
Yesterday, Comcast posted another entry on their blog entitled, "10 Facts About Peering, Comcast and Level 3". Amongst some of the points that Comcast wants us to believe is that this entire debate with Level 3 is "not about online video". Comcast says that it is simply an, "old-fashioned commercial peering dispute." If that's the case, why is Comcast imposing this new fee to Level 3 only a few short weeks after Level 3 announced a new contract with Netflix? We all know that the growth of traffic on the net is coming from video and for Comcast to say that this is "not about online video," is laughable. Companies like Comcast are struggling with trying to combat over-the-top services like Netflix. That's exactly what this debate is about – video.
Another one of Comcast's points is the idea that Level 3 is forcing the burden and cost onto Comcast's customers, which again, is absurd for them to suggest. Comcast says, "This is all about Level 3 gaining an unfair advantage over its competitors by gaining enormous additional capacity at no cost to itself, instead shifting the financial costs to Comcast's high speed data customers."
Level 3 has spent billions building out a network. The idea that there is no "cost" to Level 3 to support all of the additional video traffic they have to deliver is just wrong. Did Comcast listen to Level 3's last earnings call when Level 3 said they expected to spend $14M in capex, in the fourth quarter, just to support Netflix? Of course there is a cost to Level 3. In addition, how can Comcast say that Level 3 is "shifting" the costs to Comcast's "customers"? The customer is the one who is demanding this content. The customer is the one who is paying Comcast for the ability to get the content. Next thing you know Comcast is going to raise their rates again, and then blame Level 3 for it. Does Comcast really think we are this stupid?
Comcast also says that, "our customers can and do watch video from any online video provider, including Netflix and dozens of others, on our high-speed Internet service." Only if Level 3 agrees to Comcast fees they can. If they don't, it's going to be hard for Comcast customers to get Netflix content unless all of the requests from Comcast's network gets delivered by Limelight Networks or Comcast caches Netflix's entire library inside the Comcast network, which I don't see them doing any time soon. Comcast also makes a point to say that, "our agreement with Level 3 is no different than our agreements with its competitors." Really? What CDN, that owns their own network, does Comcast have this kind of agreement with? Akamai and Limelight don't count.
And finally, Comcast says that, "we charge a flat fee for our high-speed Internet service and do not charge any additional price to consumers to watch these online video services." So when Comcast says only four months ago that they are raising rates to help offset the costs associated with their Xfinity streaming service amongst other digital products, that's their idea of calling the service free? I don't think so.
Comcast is trying to treat the industry and consumers like we're all a bunch of idiots and don't know what type of content is growing or what we're consuming. Not a smart move on Comcast's part.