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December 6, 2010 1:03 PM

Level 3 v. Comcast Is Where Net Neutrality Gets Weird

Uh oh, net neutrality just got weirder.

A couple of weeks ago Level 3, a major Internet backbone provider and growing content delivery network (CDN), made news when it aired the dirty laundry it has with Comcast.

The gist of the dispute is that since Level 3 is becoming Netflix's CDN of choice and Netflix accounts for upwards of 20% of all Internet traffic during primetime viewing hours, Comcast has decided that the terms of their peering agreement with Level 3 need to change.

While this may sound complicated it's actually relatively simple. Prior to Netflix choosing Level 3, Comcast and Level 3 had an agreement to deliver traffic between their networks for free since each entity was delivering about the same amount of data to the other's network.

Now with Netflix as a customer, this balance is going to get thrown out of whack, with Level 3 delivering more data to Comcast than Comcast is sending to Level 3. And because of this imbalance Comcast thinks Level 3 should have to pay to deliver that extra traffic onto their network.

Before going any further I should admit that this perspective is more Comcast's than Level 3's. According to Level 3, this move by Comcast is a direct violation of net neutrality and is being driven more by Comcast's fear of how over-the-top video providers like Netflix compete with their traditional TV service than any traffic imbalance.

But the point I want to make today is showing how this dispute is a prime example of how "net neutrality" is not the simple bumper-sticker argument some make it out to be but rather issues surrounding how neutral networks should be can get very weird very quickly.

The basis of net neutrality is that the Internet needs to be open to all innovators, content providers, and users to do whatever whenever, to be an open marketplace for the exchange of ideas and services. And in general, at least publicly, everyone involved with all sides of this debate agrees with this notion.

But where the weirdness comes in is when this concept is extended to the actual delivery of Internet traffic, and the Level 3 v. Comcast dispute is a perfect example.

If you read through FCC Chairman Julius Genachowski's latest attempts to find a regulatory solution to net neutrality you'll notice that he doesn't really address how to deal with a dispute like this.

Some might argue that he's right not to try and meddle with this as Internet peering agreements have generally taken care of themselves to date, but that doesn't mean there aren't issues here, in particular the competitive disadvantage these peering agreements put smaller players at.

And it seems likely that as more bandwidth intensive apps like Netflix take off that this probably won't be the last time a dispute like this comes up.

So who's right and who's wrong in this situation? Many have rushed to judgment against Comcast, decrying their actions as a violation of net neutrality, and yet what are they supposed to do? And perhaps even more importantly, what is the FCC supposed to do or not do to try and resolve this situation?

Unfortunately I don't think there are any easy answers as we're now getting into issues that go beyond freedom of expression and get to the heart of the underlying business model for how the Interent generally and broadband specifically works.

What Level 3 v. Comcast shows me is that we can't solve net neutrality without introducing new paradigms both for how we want the Internet to work in the future, and what role government should play in making that future a reality.

Net neutrality is about a whole lot more than just freedom of speech and preserving the open marketplace that is the Internet. And if we don't realize that then the best we can hope for is minor improvements around the margins, which is basically all that Genachowski's proposed to date.

What impact Level 3 v. Comcast will have on the overall net neutrality debate has yet to be seen. But I'm hopeful that at a minimum it'll cause our policymakers to realize both that this isn't a simple topic with an easy answer as well as the fact that a solution is desperately needed to keep disputes like this from holding our country back from realizing the full potential of broadband.

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