You may have heard about the Comcast/Level 3 dispute around the ‘tubes by now. If not, then a few links for background are in order. They each give a summary, so pick your favorite.
NY Times – Media Encoder Blog
My summary is this:
Level 3 runs a major Internet backbone as well as what’s called a content delivery network. Now, the backbone is designed to deliver traffic from one geographic location to another — a set of large, long-distance, high-bandwidth links for moving traffic from one area to another. The content delivery network specializes in serving up data for people that request it, ideally by placing large data centers with speedy links near the people it will be delivering to. Well, the content network that Level 3 runs got a big, high-profile expansion when Level 3 partnered with Netflix to be the provider for their new streaming movie service. This means that Netflix will run its service out the Level 3’s data centers, depending on it to put the data where it can be quickly accessed by its customers, i.e. over home-broadband connections.
This is where Comcast comes into the picture: Comcast is the largest broadband provider in the US. Now, prior to the Level 3/Netflix deal becoming public, Level 3 had what’s called a “peering” agreement with Comcast for the traffic. This meant that Level 3 could send data to Comcast’s network and Comcast could send data to Level 3’s network for free. This is a common relationship for networks of similar size and function. Shortly after the Level 3/Netflix deal was announced, Comcast decided to end its peering relationship with Level 3 on the grounds that, with the Netflix deal, Level 3 would be sending Comcast much more data than Comcast sent it. They’re demanding Level 3 pay fees to send data from now on. From the Comcast blog:
Now, Level 3 proposes to send traffic to Comcast at a 5:1 ratio over what Comcast sends to Level 3 … We are happy to maintain a balanced, no-cost traffic exchange with Level 3. However, when one provider exploits this type of relationship by pushing the burden of massive traffic growth onto the other provider and its customers, we believe this is not fair
And, some commentary:
In order to understand this issue, I think we need to be careful to make a distinction between different types of data when it crosses from one network to another. Data originates in a network – there has to be some host that is sending it. Call this the source network. Where the data ends up is the destination network. Sometimes these will be the same network and sometimes they’ll be in networks that are directly connected to one another. But, since the Internet is world-wide, often to get from source to destination, the data will need to be routed across one or more transit networks. This is what Level 3’s backbone is. The content delivery network is primarily a source. Comcast probably has elements of all three. Its customers, both residential and business users are sources and destinations. And, because it’s nationwide, it probably does transit for other, smaller networks.
We don’t know what portion of the data Level 3 and Comcast had been exchanging fit into each of these types. Presumably Level 3 wasn’t the destination for much of the data Comcast sent it, since its business is transit and content delivery (i.e. sourcing data). What is clear, though, is that the majority of the increased data Level 3 wants to send to Comcast is bound for Comcast’s own customers who want to stream Netflix.
That’s why Comcast’s reasoning seems suspect, at best. You could expect Comcast to ask for compensation if Level 3 was using it as transport — Comcast doesn’t get any benefit from being used like that. However, Level 3 will only be serving up more data to Comcast if Comcast’s own customers request it. If Level 3 refused to pay and Comcast shut down the connections, it’s Comcast’s own customers that would suffer! Netflix traffic would have to be routed through other networks that do have agreements with Comcast. It would be like driving from Minneapolis to St Paul by way of Chicago. Level 3 is making Comcast’s broadband customers’ Internet connections more valuable, and Comcast is demanding that Level 3 pay for that privilege.
Obviously, this would be a dumb thing for an Internet Service Provider to do. That is, threaten to make the service they provide less useful. But, as I’m sure you’re aware, Comcast isn’t just an Internet Service Provider: they’re also the largest cable TV provider and streaming video is a huge threat to that.