Yesterday, Net Neutrality advocates were outraged at accusations levied by Level 3 Communications Inc. against cable giant Comcast. Level 3 Communications Inc., a provider of fiber-based communications services that supports Netflix Inc.’s movie streaming service, issued the following statement criticizing Comcast Corporation’s new fees for the right to send data to its subscribers:
“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.”
Comcast fired back, stating that such charges were necessary to keep up with the increase in congestion on its broadband network and in line with charges that it levies to Level 3’s competitors who deliver the same type of traffic to Comcast customers.
This is not the first time that Comcast has been accused of violating net neutrality and unduly regulating web traffic. In 2008, the FCC issued a finding that Comcast had illegally inhibited users of its high-speed Internet service by intentionally slowing and blocking transfers of BitTorrent files. At the time, the FCC stated that communications companies could not limit the manner in which customers use their networks unless there is a good reason. Earlier this year however, the United States Court of Appeals for the District of Columbia Circuit ruled against the FCC, stating that the FCC lacked the authority to regulate the manner in which Comcast provided its internet service to consumers. While the FCC has not commented on the current complaint against Comcast, FCC chairman Julius Genachowski presented a plan today for broadband Internet service that forbids both Internet service providers from blocking lawful content—however, this proposal would allow providers to charge consumers different rates for different levels of service. This seeming compromise met mixed reviews from net neutrality advocates who worry that the proposal doesn’t do enough to protect against telecommunication companies regulating Internet content.
What does this mean for the current debate between Level 3 and Comcast? Comcast will likely be able to impose usage-based prices, meaning they can charge customers higher prices for using data heavy services, like streaming movies from Netflix. However, the broadband companies will not be able to hide content regulation behind usage and congestion arguments and will have to report to the FCC and demonstrate why such services warrant an exception to the general open internet principles espoused by the FCC. This interpretation depends on whether the FCC has the authority to regulate Internet service providers in this manner, a proposition that has been challenged by Congress and the Courts in the past.