Level 3 Calls Out Comcast Over Streaming Video Fees

A dispute between Level 3 Communications and Comcast over content delivery fees may prove to be less about net neutrality principles and more about securing leverage and position in the emerging market for digital entertainment. Level 3 is balking at having to pay a recurring fee for Comcast’s accommodation of an expected surge in streaming video traffic. The surge is likely to come from Netflix, for which Level 3 will serve as a primary content delivery network (CDN) provider beginning Jan. 1. With the Federal Communications Commission (FCC) and Department of Justice continuing their scrutiny of Comcast’s proposed merger with NBC Universal, any hint of anti-competitive practices by the country’s largest cable provider could weigh on the regulators’ decision. In a statement alerting media to the dispute, Level 3 notes that it is fundamentally one of the Internet’s several “backbone networks” through which entertainment content travels on its way to consumers’ homes. “By taking this action, Comcast is effectively putting up a toll booth at the borders of its broadband Internet access network, enabling it to unilaterally decide how much to charge for content which competes with its own cable TV and Xfinity delivered content,” says Thomas Stortz, Level 3’s chief legal officer. “This action by Comcast threatens the open Internet and is a clear abuse of the dominant control that Comcast exerts in broadband access markets as the nation’s largest cable provider.” Level 3 has agreed to pay the fees, under protest. But the company says it is approaching open-Internet regulators and policy makers in Washington about the matter. In response, Comcast says that Level 3 has mischaracterized the dispute. “Comcast has long-established and mutually acceptable commercial arrangements with Level 3’s CDN competitors in delivering the same types of traffic to our customers,” says Joe Waz, the company’s SVP external affairs and public policy counsel. “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.” Prohibitively high CDN fees could have net neutrality implications if the cable provider was shown to be effectively blocking its customers from accessing new Internet-based video services. But the issue here is perhaps more analogous to the retransmission fee negotiations that cable providers and broadcast networks have drawn out in public (most recently Cablevision and Fox). All of these negotiations are bound to take on new levels of complexity as other companies launch would-be Netflix rivals – streaming video services that potentially compete with cable operators’ own TV channels and on-demand services. Broadcast network-backed Hulu Plus, for instance, recently exited its beta stage and lowered its monthly subscription price. Apple and Google continue to court content companies to endorse their respective TV concepts. And next year could see Microsoft join the fray with a pay-TV service of its own for Xbox 360 consoles and other connected devices (via Reuters).

Level 3 Calls Out Comcast Over Video Streaming Fees

A dispute between Level 3 Communications and Comcast over content delivery fees may prove to be less about net neutrality principles and more about securing leverage and position in the emerging market for digital entertainment. Level 3 is balking at having to pay a recurring fee for Comcast’s accommodation of an expected surge in streaming video traffic. The surge is likely to come from Netflix, for which Level 3 will serve as a primary content delivery network (CDN) provider beginning Jan. 1. With the Federal Communications Commission (FCC) and Department of Justice continuing their scrutiny of Comcast’s proposed merger with NBC Universal, any hint of anti-competitive practices by the country’s largest cable provider could weigh on the regulators’ decision. In a statement alerting media to the dispute, Level 3 notes that it is fundamentally one of the Internet’s several “backbone networks” through which entertainment content travels on its way to consumers’ homes. “By taking this action, Comcast is effectively putting up a toll booth at the borders of its broadband Internet access network, enabling it to unilaterally decide how much to charge for content which competes with its own cable TV and Xfinity delivered content,” says Thomas Stortz, Level 3’s chief legal officer. “This action by Comcast threatens the open Internet and is a clear abuse of the dominant control that Comcast exerts in broadband access markets as the nation’s largest cable provider.” Level 3 has agreed to pay the fees, under protest. But the company says it is approaching open-Internet regulators and policy makers in Washington about the matter. In response, Comcast says that Level 3 has mischaracterized the dispute. “Comcast has long-established and mutually acceptable commercial arrangements with Level 3’s CDN competitors in delivering the same types of traffic to our customers,” says Joe Waz, the company’s SVP external affairs and public policy counsel. “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.” Prohibitively high CDN fees could have net neutrality implications if the cable provider was shown to be effectively blocking its customers from accessing new Internet-based video services. But the issue here is perhaps more analogous to the retransmission fee negotiations that cable providers and broadcast networks have drawn out in public (most recently Cablevision and Fox). All of these negotiations are bound to take on new levels of complexity as other companies launch would-be Netflix rivals – streaming video services that potentially compete with cable operators’ own TV channels and on-demand services. Broadcast network-backed Hulu Plus, for instance, recently exited its beta stage and lowered its monthly subscription price. Apple and Google continue to court content companies to endorse their respective TV concepts. And next year could see Microsoft join the fray with a pay-TV service of its own for Xbox 360 consoles and other connected devices (via Reuters).

More of Today’s News Headlines from CDSA

Supreme Court Refuses Innocent Infringement P2P Case (Ars Technica) Music Publisher Criticizes Canada’s Proposed Copyright Legislation (Billboard) Netflix Stock Hits $200 for the First Time (Los Angeles Times) Court Dismisses with Prejudice Nero AG’s Antitrust Claim Against MPEG LA (via Business Wire) Disney-Pixar’s “Toy Story 3” Available on Demand Dec. 2 (PR Newswire)

PEER 1 Hosting Achieves CDSA Content Protection and Security Standard Certification

PEER 1 Hosting has become the first global online managed hosting services provider to achieve the Content Delivery and Storage Association’s (CDSA) Content Protection and Security Standard certification (CPS). The PEER 1 Hosting Atlanta Data Center has successfully fulfilled all the security requirements of the media & entertainment industry-developed and approved CDSA content security assessment program. “Customers in the gaming and entertainment industry can rely on us to host their content under stringent guidelines and have a higher level of comfort that we are safeguarding their assets and data,” explains Fabio Banducci, PEER 1 chief executive. “This certification further validates Peer 1 Hosting’s dedication towards proactive and continuous improvement of our internal controls.” Vancouver, Canada-based PEER 1 is one of the world’s leading IT hosting providers. The company’s best-in-breed technology is founded on a high performance 10Gb SuperNetwork connected by 17 state-of-the-art data centers, 21 points-of-presence and 10 co-location facilities serving 10,000 customers throughout North America and Europe. “Through its CPS accreditation, PEER 1 Hosting has effectively demonstrated its capability to effectively provide manage high-value assets for media and entertainment companies,” said Linda Dyson, worldwide director of CDSA’s Anti-Piracy and Compliance Programs. “Security accreditation punctuates its commitment and leadership as a responsible provider of secure, managed hosting services dedicated to the protection of a wide range of intellectual property — from global game producers to major motion picture studios around the globe.”

Class Action Claims Fraud, Extortion Against ‘Copyright Group’ Law Firm

The Washington, D.C.-based law firm that bills itself as the U.S. Copyright Group continues to chase thousands of anonymous defendants for file-sharing films such as “The Hurt Locker,” demanding settlements of $1,500 per alleged infringement. Now, a proposed class action lawsuit alleges that the firm’s online settlement offers contain “deceptive threats of impending (and even more expensive) litigation” — deceptive because the law firm does not have a genuine intention to pursue the claims further (via The Hollywood Reporter).

Netflix Tech Partner Accuses Comcast of Putting Up ‘Toll Booth’

Level 3 Communications, a technology service provider whose clients include Netflix, is accusing broadband and cable company Comcast of threatening the open Internet by demanding a recurring fee for transmitting movies and other content to consumers.

PEER 1 Hosting achieves CDSA Content Protection and Security Standard certification

New York – PEER 1 Hosting (TSX:PIX) has become the first global online managed hosting services provider to achieve the Content Delivery and Storage Association’s (CDSA) Content Protection and Security Standard certification (CPS). Headquartered in Vancouver, Canada, the PEER 1 Hosting Atlanta Data Center has successfully fulfilled all the security requirements of the media & entertainment industry-developed and approved CDSA content security assessment program.

“Customers in the gaming and entertainment industry can rely on us to host their content under stringent guidelines and have a higher level of comfort that we are safeguarding their assets and data,” explains Fabio Banducci, President and CEO, PEER 1 Hosting. “This certification further validates Peer 1 Hosting’s dedication towards proactive and continuous improvement of our internal controls.” Read more

More of Today’s News Headlines from CDSA

Hollywood’s Amoeba Music Has Good Friday (Variety) Panasonic Rings in the First 3D Holiday Season with Unwrap 3D Mall Tour (via PR Newswire) On an Innovative Device, Apps Lacking Imagination (The New York Times) Laser Pacific Expands Team (via Business Wire) Vevo is Gearing Up for Global Expansion (New York Post)

U.S. Seizes Domain Names in File-Sharing, Counterfeiting Investigation

While the Combating Online Infringement and Counterfeits Act wends its way through the U.S. Senate, the Department of Homeland Security’s Immigration and Customs Enforcement (ICE) unit is intensifying its effort against file-sharing and the sale of counterfeit physical goods — reportedly seizing more than 80 domain names of websites dedicated to such activities late last week. An ICE spokesperson told the New York Times that the court-ordered seizures were part of an ongoing investigation. While commenters on website TorrentFreak.com noted the obscurity of most of the seized domains, the website reported that the list included a “large hip-hop file-sharing links forum” as well as a BitTorrent meta-search engine.

More Black Friday Shoppers Pick Up Entertainment Media Products

Nearly half of Black Friday shoppers (42.1%) purchased books, CDs, DVDs, Blu-ray discs, or videogames during the post-Thanksgiving weekend, according to a National Retail Federation survey conducted by BIG Research. The percentage is up from 40.3% in 2009, and 39.0% in 2008. The holiday weekend saw an increase in the total number of shoppers: 212.5 million, up 8.7% from 2009. Average spend per shopper (for all purchases) rose 6.4% from last year, to $343.31. The increased spend in entertainment media coincided with more shoppers purchasing other discretionary items such as jewelry and toys. “While Black Friday weekend is not always an indicator of holiday season performance, retailers should be encouraged that a focus on value and discretionary gifts has shoppers in the spirit to spend,” says NRF chief executive Matthew Shay. Individual media and entertainment companies enjoyed early holiday season success. Nintendo estimates that retailers sold 900,000 combined units of the Nintendo DS family of portable gaming systems and 600,000 Wii consoles between Sunday, Nov. 21, and Saturday, Nov. 27 (via Business Wire). Meanwhile, Piper Jaffray analysts visiting brick-and-mortar Apple stores on Friday reported brisk iPad sales (via Business Insider), while Apple offered one-day discounts on other products online.

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