I just have to say it. I TOLD YOU SO! A year ago, I wrote an article entitled “Could Network Neutrality Lead to Peering Wars?“. And that’s exactly what Comcast is doing. In a response to Level 3’s revelation that Comcast is adding a surcharge for video, Comcast says it’s not about video but about fair peering relationships and traffic ratios. With the growth of online video, Comcast claims that Level 3’s traffic exchange with its network is unbalanced and hence it must charge more. The threat therefore was to end the peering relationship.
So we must now look at this from the perspective of a peering conflict, but one clearly that derives from the network neutrality debate and the heavy shift in total internet traffic toward video. Comcast feels it can’t filter competing traffic and get away with it, nor can it can’t charge its subscribers more for the bandwidth it sells them. So instead it has gone to the other end of the pipe, the peering/transit connection to demand more money. Technically, Comcast may be entirely correct – but it doesn’t change the fact that the reason behind their move is that they feel threatened by over-the-top video and wish to make content providers pay one way or another. In the end, this remains about the competitive threat from Netflix and others who make money leveraging dumb pipes that Comcast and others like them want a bigger piece of.
When I wrote that earlier post, it met polarizing responses. A few from the transit/peering side thought I was a total idiot, that network neutrality and peering had nothing to do with each other, and that the importance of traffic ratios in peering agreements would never be used in that way. Others from the nextgen carriers with long experience dealing with the last mile thought I was right to expect the last mile providers to “try to extract their pound of flesh” as one executive put it. And that’s the thing, it’s not whether peering is the correct forum for this, but rather whether it is the weakest point in the fence and therefore the best target.
The question is, when the disagreement is looked at from a peering relationship point of view, does that decrease the likelihood of the FCC’s intervention? I think maybe it does.
Another question is, what does this do to the transit/peering ecosystem? Level 3 is a Tier 1 backbone, but just one of about a dozen. Is Comcast going to be taking action against others as well? Or does Level 3’s entry into the CDN space itself just make its position as as a Tier 1 backbone less tenable?
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