The Real Story Behind the Comcast-Level 3 Battle

Although the conventional wisdom amongst Internet users is that Comcast is evil and, therefore, Level 3 must be the innocent victim of Comcast’s capricious greed, this is a complex situation without clear-cut heroes or villains — in the network game, the Comcast/Level 3 conflict is business as usual.

All of this said, no one here did anything wrong; these disputes aren't uncommon. Well, no one did anything wrong until Level 3 whined to the press and regulators. When you’re on the losing side of a peering dispute, you’re always tempted to complain to regulators about how you've been treated unfairly. Then you remember a regulated peering arrangement is the only thing worse than what we have now. More regulation puts more power in the hands of the big providers, not less, as they have the experience, resources, and the legions of regulatory lawyers necessary to “play the game.”

So, how does this play with network neutrality? The short answer is that it’s completely unrelated. Netflix isn't paying a dime to Comcast. Level 3, which sells services to Comcast, is. It’s the price of doing business when you have a large amount of outbound traffic. No user will pay more to watch Netflix movies. Netflix certainly won't see this passed on to them; the low cost of Level 3’s service is what won the deal, and if that goes away, so will Netflix, to greener pastures. Instead, this is a battle where a provider that does no business with consumers (Level 3) will pay money to a company that does provide services to consumers (Comcast). There will be no prioritization of traffic as part of this deal, only delivery. This in no way absolves Comcast of its duty — as good corporate citizens, not to mention a company trying to make a merger happen — to be more transparent, to deal openly with its customers, to improve its levels of service, to provide competitive prices.