Comcast in Net-Neutrality Spat with Netflix Partner

NEW YORK: Comcast Corporation and Level 3 Communications, a network partner of Netflix, are battling amid claims that the cable giant has started demanding an unfair fee that puts Internet companies at a competitive disadvantage.

Comcast, which has its own on-demand streaming content and pay-per-view services, has been charging a recurring fee in exchange for allowing Netflix streaming content to flow through its network. Level 3, which helps deliver Netflix’s streaming movies to customers, claims that Comcast is “effectively putting up a toll booth” on its broadband networks, which allows it to set the price for online content that competes with its own offerings.

“With this action, Comcast demonstrates the risk of a ‘closed’ Internet, where a retail broadband Internet access provider decides whether and how their subscribers interact with content,” Thomas C. Stortz, the chief legal officer for Level 3, said in a statement.

Level 3 said that it initially agreed to pay the fees "under protest" to avoid service disruption.

In its defense, Comcast claims that it is now carrying a significant amount more of Level 3’s traffic without any additional compensation. "Level 3 has misportrayed the commercial negotiations between it and Comcast," Joe Waz, Comcast’s senior VP for external affairs, said in a statement. "This has nothing to do with Level 3’s desire to distribute different types of network traffic. Comcast has long established and mutually acceptable commercial arrangements with Level 3’s content delivery network competitors in delivering the same types of traffic to our customers."