The blogosphere continues to churn over the Comcast-Level 3 kerfuffle. Level 3 even saw fit to respond to this humble blogger in a press release (a comment on a blog, a response blog or even a to-the-point tart tweet I get, but a press release?).
According to Level 3, I “missed the point completely,” in suggesting that there may be some inconsistencies between what Level 3 is saying now about Comcast and what it said five years ago about Cogent. Level 3 insists that this dispute, unlike its dispute with Cogent, is not “just a peering dispute.” Now look, I’m a Cubs fan so obviously I miss on a lot of things, but on this…let’s take a closer look.
The way I understand what happened here was that Level 3 went to Comcast and asked Comcast to provision capacity to meet Level 3’s expected (doubled) traffic volume. Comcast offered to provide some capacity but said that, if Level 3 needed more, it would have to pay for it. Level 3 believes that Comcast should simply provision the capacity to exchange traffic with Level 3 at no charge. Sounds an awful lot like a peering dispute to me. And, it sounds a lot like the press release rationale Level 3 used in its dispute with Cogent five years ago. And while Level 3 says now (and then to be fair) that traffic balance was one factor in a peering relationship, it was the ONLY factor they deemed fit to discuss in that release back in 2005.
Peering works between networks that are of similar size and scope and have similar traffic characteristics. Such networks are able to assess whether in exchanging traffic on behalf of their users, they obtain equivalent value to what they provide. Such a determination is much more difficult, if not impossible, for networks of different size and scope that have different traffic characteristics.
Traffic ratios are one indicator of whether two networks are sufficiently similar to peer equitably with each other. A ratio that is significantly out of balance is an important signal that, in fact, the two networks are not sufficiently similar. Said differently – they are not peers.
Don’t take my word for it; take Level 3’s words: “To be lasting, business relationships should be mutually beneficial. In cases where the benefit we receive is in line with the benefit we deliver, we will exchange traffic on a settlement-free basis. Contrary to Cogent’s public statements, reasonable, balanced [my emphasis, not theirs], and mutually beneficial agreements for the exchange of traffic do not represent a threat to the Internet. They don’t represent a threat to anyone other than those trying to get a free ride [once again, Level 3’s words, my emphasis] on someone else’s network.”
I’m sorry I keep quoting from this press release but the inconsistencies are hysterical.
In short, it is unreasonable to demand that a network that is not your peer provision capacity so that you can exchange traffic with its other users without paying a dime. In effect, Level 3 is demanding the right to be a customer at no charge. If such a right were to exist, investment would come to a crashing halt. In the short run, Level 3 may view this “right” as useful. But in the long run it would be devastating for everyone in the Internet ecosystem, including Level 3.
Now, when I go off on this rant, I make a lot of assumptions. For example, I assume that when Netflix went to Level 3 and asked it to provision circuits to handle the capacity necessary to shift its distribution business from the postal service to the Internet, that Level 3 responded exactly as Comcast did, i.e., it quoted Netflix a price. I also assume that that price was less than the $700M in postal costs Netflix is said to currently incur in distributing its product, so, it made sense for Netflix to sign up for the service. And I am assuming that those costs are currently recovered in Netflix’s subscription rates and borne only by the customers who sign up for the service. And finally, I assume that Level 3 is happy with the amount of money Netflix is paying them to hand them huge amounts of data. In other words, I don’t think Level 3 is accepting this enormous increase in traffic from Netflix for free.
But hey, again, I’m a Cubs fan and every year I think we’re going to win the World Series (The Cubs in 7 in 2011!), so I’m wrong a lot. I just don’t think I am wrong here. I am not saying Level 3 was looking for a free ride (I’ll leave those types of characterizations to Level 3). I’m just saying this looks to me like a typical peering dispute.