Broomfield, Colo. – Level 3 (NASD: LVLT), a content delivery network that
recently signed a major deal to deliver streaming video for Netflix (NASD: NFLX), has
accused Comcast (NASD: CMCSA) of imposing a toll on delivering Web video to consumers. "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," Level 3 chief legal officer Thomas C. Stortz
said in a statement.
"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."
Level 3 says that
earlier this month, Comcast asked for a new recurring fee to "transmit
Internet online movies and other content to Comcast’s customers who request
The company "agreed to the terms, under protest, in
order to ensure customers did not experience any disruptions," Stortz
Comcast responded by calling the matter a business dispute, rather than
a face-off over Net Neutrality.
"Level 3 is trying to gain an unfair
business advantage over its CDN competitors by claiming it’s entitled to be
treated differently and trying to force Comcast to give Level 3 unlimited and
highly imbalanced traffic and shift all the cost onto Comcast and its
customers," Comcast wrote in a blog post.
"In other words, Level 3
wants to compete with other CDNs, but pass all the costs of that business onto
Comcast and Comcast’s customers, instead of Level 3 and its customers."
Level 3 in turn responded to Comcast’s statement, saying it is
"regrettable that Comcast has sought to portray this simply as a
commercial disagreement or a peering dispute," and calling on Comcast
"to reconsider its untenable position."
The Wall Street Journal
reports that the Federal Communications Commission (FCC) is now seeking
information from the companies regarding the dispute.