Rumor: Akamai Got Kicked Out of FranceRumor: Akamai Got Kicked Out of France

An industry source tells Light Reading that Akamai Technologies Inc. (Nasdaq: AKAM) lost its video caching privileges with three French service providers at one point.

The result? Akamai had to do its "local" French caching from the U.K.

The timing of the situation is unclear -- the source believes it happened more than six months ago -- and it's possible the disputes have been resolved by now. The ISPs and Akamai seem to have kept the whole affair quiet.

If all this really happened, it would indicate how strained the relationship between service providers and content delivery networks (CDNs) is becoming. It's not just Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Level 3 Communications Inc. (NYSE: LVLT).

The source believes Akamai got into separate disputes with Orange France , SFR , and a third provider, (probably Free but possibly Bouygues Telecom ), with the service providers demanding payment in exchange for carrying the video traffic Akamai was delivering. As in the Comcast/Level 3 case, that transit was being provided for free, but the service providers began to consider the relationship too lopsided. (See Comcast: Level 3 Balks at Trial Offer and Level 3: This Is Not a Peering Dispute.)

When Akamai said no, the service providers said "no" to Akamai's local caches, according to the source.

CDNs and operators might yet find common ground. But another possibility is that we're seeing a part of the CDN business model start to unravel.

Our source's belief is that, ultimately, big service providers will do their own caching, eliminating the middleman. Many have the tools -- AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) come to mind -- but they haven't been a threat to established CDNs so far. (See AT&T Develops Its CDN Business, AT&T Applies Peering Pressure and Verizon Expanding CDN Partner Program.)

— Craig Matsumoto, West Coast Editor, Light Reading