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FCC looking into Comcast / Netflix blocking threat, Level 3 responds as analysts chime in

FCC looking into Comcast / Netflix blocking threat, Level 3 responds as analysts chime in

News that Comcast had threatened to block internet backbone Level 3, which is one of the companies delivering Watch Instantly streams, sent shockwaves through the industry yesterday. Net neutrality advocates geared up for battle, Comcast insisted it was only enforcing the same arrangements other networks abide by while Roger Ebert and the rest of us fretted over Netflix access. Today, Level 3 issued a response to Comcast, claiming it is “distracting from the fundamental issue” which is free use of all content on the internet for its customers. Meanwhile, Multichannel News points out industry analysts say Level 3’s claims of traffic discrimination “appear unfounded” while VideoNuze editor Will Richmond supposes Level 3 may have “bid too aggressively for the Netflix business and is now trying to recover.” Most damaging to Level 3’s argument are its own words from a dispute where it sought financial compensation from Cogent for using too much of its network’s bandwidth:

“For example, Cogent was sending far more traffic to the Level 3 network than Level 3 was sending to Cogent’s network. It is important to keep in mind that traffic received by Level 3 in a peering relationship must be moved across Level 3’s network at considerable expense. Simply put, this means that, without paying, Cogent was using far more of Level 3’s network, far more of the time, than the reverse. Following our review, we decided that it was unfair for us to be subsidizing Cogent’s business.”

Beyond analyst opinions and posturing the question of whether or not Comcast has the power to set pricing for access to its network, creating the toll road Level 3 is accusing it of being, is still at issue. That will certainly come into play at the FCC, where chairman Julius Genachowski mentioned at today’s meeting that the agency is looking into Level 3’s claims at the same time it continues to review the joining of Comcast and NBC. As far as your Netflix streams? Safe for now, though the company isn’t commenting, Level 3 isn’t the only provider it relies on for access and how any deal it might reach with Comcast could affect the service is still unclear.