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Comcast: Level 3 Balks at Trial Offer

Jeff Baumgartner
12/17/2010
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Just when Level 3 Communications Inc. (NYSE: LVLT) and Comcast Corp. (Nasdaq: CMCSA, CMCSK) appeared to have found some common ground on their dispute over network traffic sharing, a blog post has revealed that the two sides remain at odds over dollars and cents as the Federal Communications Commission (FCC) draws closer to its vote on new network neutrality rules.

The dispute between the companies took another turn Thursday night when Comcast posted an update on the matter, claiming it offered to test out a "different architectural approach" put together by the two companies, but Level 3, the MSO said, balked at the idea when the MSO declined to agree to a "'zero cost' outcome" until it could gauge the results of the proposed trial.

According to John Schanz, Comcast's EVP of national engineering and technical operations, the two sides held several face-to-face meetings during a 48-hour period, coming up with a "potential new and different architectural approach that we proposed to trial with Level 3 as soon as next month."

Schanz didn't divulge any of technical details on this newly crafted option, which would represent "a significant shift of Internet infrastructure." But he did allow that the approach would require a "mutual and relatively modest investment" that would help both sides "better understand the traffic, routing, and economic considerations."

Comcast, he said, offered to keep the new agreement between the companies, which is the subject of the kerfuffle, at "no cost" until both companies could glean the actual costs of the new approach.

While that indicates that progress was being made, "Level 3 chose to leave the meeting when we wouldn't agree to a 'zero cost' outcome without the benefit of a trial and the opportunity to understand -- with Level 3 -- the full implications of the new approach, including the impact on our mutual customers," Schanz added.

Level 3 did not have an immediate response to Comcast's progress report.

Why this matters
Comcast and Level 3 are at odds regarding the fundamental basis of the imbroglio. Comcast insists it's just a run-of-the-mill peering dispute following Level 3's new deal to carry Netflix Inc. (Nasdaq: NFLX) traffic, a deal that will end up dumping more traffic on the MSO's networks than Comcast is sending to Level 3's. Level 3 claims Comcast is violating net neutrality rules, alleging that the MSO's intention is to create "toll booth" for competitive over-the-top video services.

This fight entered public view just weeks before the FCC was set to vote on a new set of new network neutrality rules, which will reportedly be a slam dunk when the agency meets on Tuesday, Dec. 21. Level 3 also aired its original complaint as Comcast hopes to close its NBC Universal acquisition without being hit with a flood of troublesome conditions.

For more
For more on how all the punches have been traded so far, please check out the following stories:



— Jeff Baumgartner, Site Editor, Light Reading Cable



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Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Sabre
12/5/2012 | 4:15:48 PM
re: Comcast: Level 3 Balks at Trial Offer


To further the implications on all this, Level 3 is also calling on the FCC and DoJ to apply Net access conditions on the proposed Comcast-NBCU deal.  Among the conditions, Level 3 is asking for a guarantee that it, and other large backbone providers, wouldn't have to pay the MSO to deliver Internet traffic for five years.


 

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Sabre
12/5/2012 | 4:15:28 PM
re: Comcast: Level 3 Balks at Trial Offer


New tactic from Level 3... now saying Comcast broke an NDA by revealing details about the trial, and complaining that the trial wasn't offered "in good faith" and "incorrectly [implies] that Level 3 is acting unreasonably." JB


 

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