Tuesday, December 7, 2010

The Net-Neutrality battle heats up with online video

(Post by Edwardo Sackey, Andrew Lei, Liza Gutina,Emmanuel Badoo)

There is a battle brewing between Comcast Corp and Level 3 Communications. This spat arose because of Comcast's demands that Level 3 Communications pay exorbitant fees to deliver Netflix content to Comcast subscribers. Below is a snippet from a Bloomberg article on Dec 3rd

“….Level 3 Communications Inc., accusing Comcast Corp. of setting up a “toll booth” for Web traffic, said the cable carrier is trying to protect its TV business by charging Level 3 for delivering video to its customers.

“Online distribution of movies, TV shows and other content threatens Comcast’s traditional ‘closed’ video distribution model,” the company said. Broomfield, Colorado-based Level 3, which provides broadband services to customers including Netflix Inc., made the statement in a 19-point public letter today….”

Do you feel Comcast by charging Level 3 Communication a fee will protect its TV business?


  1. Yes, I think that net-neutrality is a perfect world scenario and will have trouble existing under capitalism. It's in Comcast's best interest to protect their position in the TV business. Comcast is known to be very aggressive in protecting its products. I think it was about a year ago that the tried to prevent customers from using its broadband if they determined that the customer was using file-sharing software. The FCC ruled it illegal say people can use the internet as they want to and Comcast was fined. So it seems that Comcast is not a believer in net-neutrality.

  2. A similar thing is happening in Canada. The $8.99 Netflix service launched here last month. Just prior to the launch, Rogers Cable (National cable operator, and internet provider) decreased their bandwidth caps, and increase the overage fees. They have been quoted as saying "this is unrelated to the launch of Netflix" (how do you spell that pffft sound?)

    Here's what's happening here… The telco's are the other major provider of Internet services. Though all the telcos have some form of IP TV and/or Sat service, it’s not their core business. Their actions would indicate that they are willing to sacrifice this emerging IP TV business if it hurts their competitors in the cable space. The telcos are actually increasing bandwidth delivery and most have no (or very high) usage caps…. so, current Cable internet customers are just starting to get their huge bills for using Netflix… and customers are getting wise and beginning to switch to the Telco Internet providers.