Wait, is Comcast really putting the squeeze on competitors?

By Richi Jennings. November 30, 2010.

I'm not sure Robert L. Mitchell is being entirely fair and balanced in his article posted earlier, Comcast puts squeeze on competitors. It seems a bit one-sided to me. In the interests of balance, here's the other side of the story, in The Long View...
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DEITY knows I'm no Comcast fanboi, but there's usually two sides to any story. This one's no exception.

As Comcast portrays it, Level 3 is shopping itself to Netflix and others as a CDN, but demanding an ISP-style peering agreement with Comcast. (A CDN is a content delivery network; in simple terms, a bunch of content caches in strategic network locations, which places content closer to the end-user. Perhaps the best known CDN is Akamai.)

It's a long-standing market reality that ISP peers -- which tend to send and receive a roughly equal amount of traffic across a peering link -- don't pay a fee to interconnect with each other. Meanwhile CDNs like Akamai do pay, because the traffic flow is highly asymmetric.

Comcast's stated position is that Level 3 can't have it both ways. If it walks like a duck and quacks like a duck, then it's probably a duck and should be billed (sorry) as a duck.

I know it's tempting to assume Comcast's motivation is connected with its involvement with competitive content, but the company does paint a compelling picture of "Level 3 trying to gain an unfair business advantage."

Robert also mentions Comcast's end-user pricing. I'd forgotten how ridiculously expensive U.S. internet access is. As I mentioned a while ago, I get a 12Mbps down, 1.2Mbps up ADSL2+ service for about $15/month, including an all-in-one modem/router/wireless access point. The service is highly reliable, uncapped, and rarely if ever do I notice contention or congestion.

By the way, that's not dependent on some sort of triple-play bundle of other services, although such bundles are available and are very attractive.Carriers sell bundles at an apparent discount because the customer acquisition cost is of course lower. Also because the extra services act as a lock-in, increasing customer inertia against switching to a competitor.

Amid growing concerns over network neutrality, let's not forget the basic realities of how the internet works. Let's also not forget how poorly most U.S. consumers are served, in terms of competition for broadband internet access.

There's more on this story in today's IT Blogwatch.

 
What do you think? Leave a comment below...
 

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Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. A cross-functional IT geek since 1985, you can follow him as @richi on Twitter, pretend to be richij's friend on Facebook, or just use good old email: TLV@richij.com.

You can also read Richi's full profile and disclosure of his industry affiliations.