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Cable Technology Feature Article

December 10, 2010

Cable: Peering Dispute Between Level 3 and Comcast, or Not?

By Gary Kim, Contributing Editor

The current commercial disagreement between Level 3 Communications and Comcast (News - Alert) is characterized by some as a simple contract matter between IP network operators, and by Level 3 Communications and others as something different: a network neutrality infraction. 

Level 3 says "what is truly at stake is whether consumers should have unfettered access to all the content on the Internet without regard to whether that content happens to be owned or packaged by Comcast." It is, in other words, not an interconnection dispute but a network neutrality infraction. 

Level 3 says the "issue is a fundamental interconnection disagreement between Comcast, as a provider of local high speed Internet access to consumers who pay Comcast for access to content, and Level 3, which delivers content to residential broadband access providers like Comcast in response to consumer requests." In other words, the issue is not interconnection generally but impairment of "video bit" delivery by Level 3 to Comcast end users. 

Level 3 alleges that Comcast wants to extract monopoly profits from its existing multichannel video service and discourage competition from Netflix, and seeks to position the argument as a matter of content infringement, not interconnection 

Oddly enough, notes Bob Quinn, AT&T (News - Alert) senior vice president of federal regulatory and chief privacy officer, Level 3 has in the past had interconnection disputes with partners, and clearly saw them as interconnection agreement issues.

Quinn notes that Level 3 said in 2005 that its dispute with Cogent Communications about interconnection posed precisely the same issues that Comcast is raising with Level 3.

“There are a number of factors that determine whether a peering relationship is mutually beneficial," Level 3 pointed out at the time in an Oct. 7, 2005 press release. "For example, Cogent was sending far more traffic to the Level 3 network than Level 3 was sending to Cogent’s network."

That is precisely the argument Comcast now is making about its interconnection arrangements with Level 3. 

"It is important to keep in mind that traffic received by Level 3 in a peering relationship must be moved across Level 3’s network at considerable expense," Level 3 said. "Simply put, this means that, without paying, Cogent was using far more of Level 3’s network, far more of the time, than the reverse."

In its latest disagreement with Comcast, Level 3 says the issue now is content freedom, not interconnection. Some might say the Cogent issue, and the Comcast issue, are the same. 

To be sure, there are all sorts of advantage to be gained in business by filing lawsuits, alleging patent infractions and so forth. It happens all the time. So some will argue Level 3's change of language is an attempt to gain business advantage. If Comcast can be painted as infringing network neutrality, it is a different matter than if the two parties simply have a rather routine business disagreement about interconnection. 

In 2005, Level 3 created quite a stir in the Internet infrastructure community when it unilaterally “de-peered” Cogent Communications without informing any of Level 3’s or Cogent’s customers.

Level 3 and Cogent had a settlement-free peering arrangement that Level 3 felt Cogent was violating. Those types of agreements are generally based on a set of criteria that may include provisions like each party agreeing to maintain a network that is roughly equivalent in size and scope (a party may require a certain number international and/or domestic interconnection points), a commitment to interconnect at a specified bandwidth (AT&T requires OC192), and a commitment to exchange roughly the same volume of traffic (AT&T’s current settlement-free peering ratio is 2:1), says Quinn.

The basic concept behind those requirements is simply that the relationship has to be mutually beneficial to both parties, since no money is exchanging hands.  

Companies that do not meet the settlement free peering criteria will generally enter into an agreement for some form of paid peering or transiting arrangement. AT&T has a relatively small number of providers with whom it has settlement-free arrangements but many more agreements that are for some form of paid peering/transiting, Quinn notes. 

Back in 2005, Level 3 explained its actions with Cogent by arguing that Cogent was utilizing “far more of Level 3’s network, far more of the time.” Because Cogent was delivering far more traffic to Level 3 than it was receiving from Level 3, Level 3 asserted that settlement free peering was not appropriate – the arrangement was not mutually beneficial and Level 3 was therefore being asked to “subsidize” Cogent’s business. 

Comcast asserts that Level 3 has stated its volumes will double in the coming months and its traffic balance ratios will increase from +2:1 to 5:1, similar to Cogent’s increasing traffic imbalance with Level 3 in 2005.  

But whatever the reason, balance (or imbalance) in a peering relationship is important for the very same reason Level 3 claimed five years ago. When traffic flows to a broadband provider increase, the provider has to augment its infrastructure and build out more bandwidth to carry that traffic to its customers, Quinn says. 

But irrespective of how this dispute ultimately gets resolved, it is decidedly not a net neutrality issue, Quinn argues. "Comcast simply wants to be compensated for the additional volume of traffic that Level 3 is delivering to Comcast, which Comcast has to deliver to its customers," says Quinn. "Comcast doesn’t care whether that traffic is video or music or email or web pages." 

Comcast, of course, would argue otherwise. 


Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Tammy Wolf