Tuesday, November 30, 2010

Comcast fees for Level 3 and Netflix set up the net neutrality ballteground

Cecilia Kang has an important story on p A17 of the November 30, 2010 Washington Post, “Firm calls Comcast fees for Netflix feeds unfair: Level 3’s complaint speaks to fears about NBC Universal deal”, link (website url) here.

The focus is on additional fees charged by Comcast on feeds through Level 3 Communications (link) whose main client seems to be Netflix. Apparently these fees apply when consumers watch movies in Instant Play on their computers on high speed Internet or pipe it through Web or Internet TV (which I am not doing yet but plan to do in 2011). Netflix recently raised subscription rates for 2011, possibly in part as a result of these fees.

As the W3C chairman noted (last post), there is legitimate fear that Comcast and other telecommunications providers will charge a premium for transmit other people’s content.

But Comcast also fears that Netflix’s Instant Play service can propel cable subscription losses. To some extent, cable channels like HBO have tried to offset these losses by offering their movies on demand at any time. Another technique is for companies like HBO to work more closely with major motion picture companies and distributors (and theater chains like Landmark) to achieve some theatrical presence even for films originally intended for cable. This is of interest to me because I want to get my “Do Ask Do Tell” project going soon. The segmentation of movies into “theater” and “cable” and “instant play” is no longer a viable business practice.

Jessica E. Vascellaro and Nat Worden have an account in the Nov. 30 Wall Street Journal "Comcast disputes Level3's accusations" here.

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