The largest broadband backbone provider in the world says Comcast has set up a tollbooth, charging it a fee to deliver Netflix content to Comcast customers. “This action by Comcast threatens the open Internet and is a clear abuse of the dominant control that Comcast exerts in broadband access,” said Level 3 in a statement.

Here’s the deal: recently Level 3 outbid Content Delivery Network provider Akamai to handle bringing streaming Neflix video.

Lacking leverage, Akamai paid Comcast a traffic delivery fee. Level 3 doesn’t want to keep paying the fee. Comcast says they better pay the toll, or they can’t cross their bridge.

Comcast called Level 3’s claims “duplicitous,” saying, “Comcast has long established and mutually acceptable commercial arrangements with Level 3’s Content Delivery Network (CDN) competitors in delivering the same types of traffic to our customers. Comcast offered Level 3 the same terms it offers to Level 3’s CDN competitors for the same traffic. But Level 3 is trying to gain an unfair business advantage over its CDN competitors by claiming it’s entitled to be treated differently and trying to force Comcast to give Level 3 unlimited and highly imbalanced traffic and shift all the cost onto Comcast and its customers.”

Industry analyst Dave Burstein told Consumerist, “The Justice Department should step in with antitrust.”

“As far as I know, no primary backbone provider like Level 3 has ever been required to pay to deliver traffic to another major carrier. Payments have only been required from smaller carriers who are not truly “peers.”

“In particular, Comcast’s claim their charge to a backbone provider is ordinary “paid peering” is bs. The details of Comcast’s claims would mean they collect a fee from every bit, especially video over the Internet unless it’s sent by AT&T or Verizon. AT&T and Verizon would of course gladly collect fees for video to their customers as well.”

The news is the latest salvo in the Net Neutrality battle and comes at a time when Comcast is under regulatory scrutiny the merger it is eager to make with NBC. Some, including publishers of this blog, Consumers Union, say the proposed merger would limit consumer choice and increase prices.

Comcast Starts Online Video `Toll Booth,’ Netflix Supplier Says [Bloomberg]
Comcast Comments on Level 3 [blog.comcast.com]
Level 3 Communications Issues Statement Concerning Comcast’s Actions [Press Release]

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