Uncommon Wisdom

Nov 30 2010   1:18PM GMT

Level 3/Comcast transport dispute bigger than peering issue

Tom Nolle Tom Nolle Profile: Tom Nolle

With Cyber Monday turning in good numbers, it’s ironic that we’re also seeing more stress cracks in the business model of the Internet in its broadest sense. The popular hope that somehow things will just get better and cheaper forever is colliding with hard economic reality within the ecosystem as players work against each other to grab profits when paths to profitability are far from clear.

Today, Comcast and Level 3 revealed a fundamental problem with transport with the former demanding that Level 3 pay for transport of Netflix video that Level 3 is being paid to cache and deliver as a CDN. Level 3 is crying foul under net neutrality, but Comcast was the company whose appeal of the FCC’s rules resulted in the Court of Appeals declaring the FCC had no right to enforce such principles. While many will see this as yet another example of Comcast being the bad boy of ISPs, it’s really a sign that ISPs are fed up with people creating business models that depend on Internet access and transport and not paying for either one.

There’s only one thing that’s clear at this point, and that’s the fact that we can’t go on the way we are. Market forces worldwide are speaking the language of profit, and that speech won’t be ignored.

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