The argument between Netflix partner Level 3 and Comcast over carriage fees looks set to get a lot uglier with the news that Level 3 has asked the FCC to step in and put conditions on Comcast’s merger with NBC Universal. The company is asking the FCC to enforce on Comcast a five year period where interconnection agreements would be made on “nondiscriminatory, fair and reasonable terms,” with a further suggestion that Comcast should be made to connect certain internet backbone companies “on a settlement free-basis.”
Unsurprisingly, Comcast has responded negatively to this move, releasing a statement calling it “grossly improper” and heavily weighted in Level 3’s favor:
What Level 3’s new position is all about is its view that broadband Internet customers — on Comcast’s network but eventually on all ISP networks — should subsidize Level 3’s business by shouldering massive new costs imposed by Level 3. And Level 3’s proposal — which the company’s ex parte makes clear it wants to impose throughout the Internet marketplace — also calls for pervasive FCC oversight not only of the economic terms of peering and transit relationships, but also the physical interconnection issues of the type that have created intractable disputes and regulatory morass on the PSTN for nearly a quarter of a century.
Level 3’s petition to the FCC comes despite ongoing talks with Comcast that, if Comcast’s statement is to be believed, had reached the stage of a good faith offer being made to and accepted by Level 3. The FCC has not commented on the matter as yet.
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