Is Level 3 Right About Net Neutrality?

Cable MSOs and telcos are usually trying to slash each other's throats, but some of them have sheathed their swords long enough to form a uniform front when it comes to the dispute between Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Level 3 Communications Inc. (NYSE: LVLT).

AT&T Inc. (NYSE: T) and the National Cable & Telecommunications Association (NCTA) want Federal Communications Commission (FCC) Chairman Julius Genachowski to reject Level 3's claims that the peering dispute is subject to the FCC's recently approved network-neutrality rules.

In a six-page letter sent Monday, they point out that backbone operators like Global Crossing (Nasdaq: GLBC) and Internet firms such as Voxel Dot Net Inc. will continue to raise similar claims and "send a troubling signal to the financial markets and the international community."

They also want the FCC to declare that it will not stick its nose into these kinds of disputes.

Their letter comes shortly after Global Crossing recommended that the FCC resolve the Level 3/Comcast quarrel because "broadband ISPs are distorting the economics of the historical peering relationship that existed between carriers."

Comcast wants its old peering arrangement with Level 3 thrown out and a new one established because Level 3, with a new Netflix Inc. (Nasdaq: NFLX) deal in hand, will be dumping much more traffic onto the MSO's networks.

Why this matters
Level 3 insists Comcast's demands amount to a violation of net neutrality, and the NCTA and AT&A are worried that the FCC might agree. That would bring Internet backbone services into the net-neutrality discussion, possibly opening the floodgates for complaints that would refocus the net-neutrality debate away from user access and more toward how the Internet itself is regulated.

If the FCC stays out of this, then Comcast and Level 3 would have to duke it out privately, which is historically how these disputes have been resolved.

For more
For a gander at the FCC's net neutrality rules and the Comcast/Level 3 kerfuffle, please check out:

— Jeff Baumgartner, Site Editor, Light Reading Cable

Jeff Baumgartner 12/5/2012 | 5:12:48 PM
re: Is Level 3 Right About Net Neutrality?

Suppose we'll be getting a reax from Level 3 soon, but in the meantime, here's the letter that featured the NCTA/AT&T tagteam. JB

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