Is Comcast A Threat To The Internet?

from the competition-is-the-thing dept

Tim Lee has written a long, detailed and really thought-provoking article for National Affairs Magazine, all about what it takes to keep the internet competitive. Lee, who has a reputation for being generally skeptical of regulation without real evidence that it's needed, actually comes down on the side of suggesting that certain key regulations probably make sense to keep the internet competitive, with a specific focus on limiting Comcast's power to directly impact the market, and to effectively disrupt the internet's decentralized nature. It's a persuasive piece that doesn't shy away from the fact that telecom regulations are incredibly complex, and anyone who argues that any change to the existing market is putting regulations where none existed before is delusional, since the whole space is already highly regulated -- it's just a question of how that regulation might shift around.

The key point in all of this is that the guiding star of anyone trying to keep the internet vibrant should be making the market truly competitive with no dominant power able to make significant shifts in the core underpinnings of what makes the internet work. Lee uses the Comcast/Level3 dispute from a few years ago to suggest that Comcast is potentially shifting the traditional contours of the internet's competitive market:

Comcast's large share of the broadband market, along with the fact that most of its customers have few if any comparable alternatives, gives Comcast significant leverage in negotiating with backbone ISPs. Comcast has traditionally been a customer of Level 3, one of the largest internet backbone providers. When a Comcast user exchanged data with a network that was not directly connected to Comcast's own network, Comcast paid Level 3 to carry that traffic.

But in November 2010, the two firms became locked in a bitter dispute. Level 3 had just won a contract to deliver content for Netflix, one of the internet's largest video services. Anticipating that Netflix would generate more traffic than the existing links between the Comcast and Level 3 networks could accommodate, Level 3 proposed installing additional links between the networks. Ordinarily, Comcast, as a Level 3 customer, would gladly accept what was essentially a free upgrade. Instead, Comcast refused to accept the new connections unless Level 3 agreed to pay Comcast for the additional traffic. And Level 3, after voicing strong objections, paid up.

There's a lot more to this -- and Lee highlights some of the more detailed nuances as well, so don't just go on this brief summary -- but he argues it's a sign of the power that Comcast has been building up. I highly recommend reading the full thing if you're thinking at all about the issue of regulations on broadband service providers, and the future of the internet.

Filed Under: antitrust, internet, monopolies, reguations, rights of way
Companies: comcast