The Grand Slam of Wrong

Posted by: Bob Quinn on February 18, 2011 at 12:02 pm

So, yesterday afternoon, Level 3 filed a three-page, single spaced letter to FCC Chairman Genachowski explaining to him that he didn’t really mean that the Comcast/Level 3 dispute is not covered by the FCC’s recently announced net neutrality rules and the press got it wrong.

To do that, Level 3 set forth, in quotes, its version of the exchange between Congresswoman Blackburn and Chairman Genachowski and then dissected each word to conclude that the Chairman had left himself enough wiggle room for people to understand that this was not a peering  dispute (wrong); that the Commission does not have the facts before it that would allow the agency to determine that this is a peering relationship (wrong again – what was in the 15 filings – yes, 15 separate filings – on this issue that Level 3 has made at the FCC if not “facts”?); that Level 3 is not asking for regulatory intervention into other services beyond the rules’ limited scope of consumer and small business broadband Internet access service (wrong a third time – Level 3 is not seeking broadband Internet access from Comcast and neither Comcast nor Level 3 is a consumer or small business); and that Level 3 is not asking for price regulation (the grand slam of wrong – Comcast wants to charge $X and Level 3 wants to pay $0.  It’s all about the rate).

Despite Level 3’s strenuous efforts to spin Chairman Genachowski’s comments, his answer to Congresswoman Blackburn’s question should have made it clear to everyone that the FCC does not plan to insert itself into what the Chairman correctly described as “a commercial dispute” between companies like Level 3 and Comcast.  

The Chairman has said frequently, consistently and repeatedly that he has no intention of regulating Internet backbones, CDNs and the myriad other commercial arrangements that make up the Internet despite the constant invitation to do so by Level 3.  And he stated at the hearing, again, that he has no intention of engaging in price regulation for any Internet services, whether subject to the new net neutrality rules or not.

I too hope Comcast and Level 3 work out their differences.  But I will tell you right now that as long as Level 3 thinks it has a shot at a regulator imposing Level 3’s will in this debate, it will not get serious about negotiating this or any other commercial arrangement that brings value to both sides of the relationship, even though every other peering arrangement has been worked out through commercial negotiation – without government intervention – for the past 25 years.  Indeed, that reality could not be brought home more clearly than by the fact that Level 3 has chosen to conduct this private commercial negotiation and its aftermath in the press and at the FCC.

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