Is Comcast Trying to Kill NetFlix?


NEW YORK (MainStreet) — There’s a war brewing on the Internet, and soon it may hurt consumers.

Comcast, a major Internet provider, recently began charging a ‘recurring fee’ to Level 3, a communications company that partners with Netflix to stream movies online to customers who use Comcast. Now, some are arguing that this move goes against the idea of a free and open Internet.

“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,” said Thomas Stortz, chief legal officer of Level 3, in a press release.

Level 3 inked a deal earlier this month to host videos for Netflix and stream them to consumers. As a result, the company required significantly more bandwidth from Comcast to deliver these videos, prompting the latter to impose a new extra fee. And according to Level 3, Comcast offered the company no other alternative.

“On Nov. 22, after being informed by Comcast that its demand for payment was ‘take it or leave it,’ Level 3 agreed to the terms, under protest, in order to ensure customers did not experience any disruptions,” Stortz said.

Not surprisingly, Comcast disagrees with Level 3’s assessment.

“Level 3's position is simply duplicitous,” the company said on its website. According to Comcast, Level 3 is trying to impose “the burden of massive traffic growth” without being willing to compensate the company for their troubles.

Still, the move has touched a nerve for consumers and activists concerned about net neutrality, a principle that argues all online content should be treated and priced the same by Internet providers.

More than 70,000 people have already signed an online petition from the Progressive Change Campaign Committee urging the Federal Communications commission to take a stand on the issue and come out in defense of net neutrality and against Comcast. And the FCC, for its part, announced Wednesday that it is preparing to vote on net neutrality soon, perhaps partly in response to this new controversy.

Regardless of whether you agree with Comcast’s right to price its services as it likes, or with Level 3’s argument that this gives too much power to Internet providers and violates net neutrality, there’s a strong possibility that this move could be dangerous for consumer’s wallets. Just think: If Comcast is allowed to charge extra fees to sites like Netflix for delivering videos, it could set a precedent for other video and gaming sites as well. And if these online services incur more costs, they could choose to pass on the costs to their customers down the road, making it all the more expensive to get your monthly entertainment fix.

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