Level 3-Comcast Dispute Brings Chance to Widen Neutrality Debate, Advocates Say
Advocates of net neutrality rules pounced on a dispute between Level 3 and Comcast, seeing an opportunity to widen the debate. “The point of this is, that at a minimum it has the strong appearance of anti-competitive behavior,” Public Knowledge spokesman Art Brodsky said. “At a maximum, there could be some net neutrality implications to it, depending on the net neutrality guidelines.” Chairman Julius Genachowski said Tuesday that FCC staffers are examining Level 3’s allegations. He declined to say more about the dispute when asked about it at a news briefing after Tuesday’s FCC meeting.
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Some, including neutrality advocates, said the dispute concerned a different matter and cautioned against using it as a wedge. “Net neutrality is almost a sideshow in comparison to the dilemmas that are presented by having a single pipe controlled by a single player,” said Susan Crawford, a Cardozo School of Law professor and former telecom adviser to President Barack Obama. “I see this more as a cautionary tale that ordinary pay disputes change their coloration when the disputes involve players with enormous last-mile market power."
Late Monday, Internet backbone provider Level 3 accused Comcast of erecting a “toll booth” by charging for the transmission of “online movies and other content” to the cable operator’s customers. Level 3 said the demand came just days after it announced it would be the main carrier for Netflix, the home-video company that many hope will become the new champion of neutrality rules.
Level 3’s allegations came hours after modem maker Zoom accused Comcast of arbitrarily excluding its products with burdensome product tests. Net neutrality advocates said the two disputes were evidence that the FCC must impose strong open Internet rules. “Policymakers should see this as the third strike for Comcast, following the BitTorrent complaint, the complaint by Zoom modem manufacturers over treatment of their products and now this,” Public Knowledge said.
Comcast and allies said Level 3 was misleading the public by conflating a peering dispute with a net neutrality dispute. “They're throwing a hand-grenade into a crowd,” said Chairman Scott Cleland of Netcompetition.org, which opposes net neutrality rules. “This kind of complaint is saying … ‘we need to regulate the Internet backbone for the first time.’ That would be an unmitigated disaster."
Others accused Level 3 of acting in bad faith. The company “ginned up” the dispute because it saw “opportunity to ‘leverage’ -- a word it likes to toss around -- the pending Comcast-NBCU merger and net neutrality regs to its commercial advantage,” said President Randolph May of Free State Foundation, another opponent of neutrality rules. “Unfortunately, the commission is an enabler of this type of unproductive conduct."
Level 3 hadn’t filed a formal complaint with the FCC, partly because the company was hoping Comcast would reverse its position, said a public interest official who has been briefed on Level 3’s strategy. Comcast and Level 3 had been scheduled to meet later this week, Comcast spokeswoman Sena Fitzmaurice said. Level 3 officials didn’t respond to requests for comment.
Whatever Level 3’s motivations, Comcast’s wounds from the matter are self-inflicted, Stifel Nicolaus analysts wrote investors Tuesday. “If Comcast imposed a new charge on Level 3 on the basis of its newly imbalanced traffic, which is largely due to competing video traffic, that could raise a more complicated set of questions for regulators about the effect of the fee,” they wrote. “And that also raises the question of why Comcast picked this moment to impose the new charge, which if nothing else could muddy the merger review and net neutrality proceeding.” If Comcast doesn’t “quickly knock down” Level 3’s allegations, it may “complicate its push to receive final regulatory approval for the NBCU deal by year-end,” the analysts wrote.