According to a reports from a number of credible sources, it looks as though Comcast has had just about enough of streaming content providers, or more to the point, Netflix. Back on November 19th, the company, which is no stranger to bullying high-bandwidth users, informed Level 3 Communications--the contractor responsible for making Netflix’s streaming magic happen--that they would be forced to pay a toll for the privilege of being able to transmit content to end-users on their network. The broad strokes of the story are that Level 3 gave into Comcast’s demands in order to ensure uninterrupted Netflix service to the millions of Comcast users who rely upon the streaming service for the few hours of media-enabled escapism that their day affords. However, looking deeper into the issue, the devil is most certainly in the details.

With the recent announcement that Netflix is responsible for close to 20% of all downstream Internet traffic during peak usage hours, it was only a matter of time before an ISP decided to take a swipe at them. It should come as no surprise that Comcast would be the ones to deliver the upstart DVD delivery and video streaming service the comeuppance they apparently deserved. After all, aside from their being one of the largest ISPs in the United States, the company also holds stakes in cable and their very own Fancast media streaming solution: two businesses that the growing popularity of Netflix directly threatens. It’s because of conflicts of interest exactly like this that the debate over Net Neutrality has become such a hot topic. For some time now, the Federal government, and a number of companies with vested interests and somewhat less than scrupulous designs on the subject, have been trying to come to an something resembling an agreement on the matter. Without a law--or at the very least, a code of conduct that ISPs can agree to adhere to--there is nothing to stop a company from throttling specific types of data traffic or refusing access to their networks should it please them to do so.

This, as we can now see, is exactly what Comcast is doing. Why are they doing it? We’d suggest that Netflix’s success arguably comes at a loss from Comcast’s coffers. As such, Comcast has opted to try and recoup some of that potentially lost on-demand media and cable revenue by charging Netflix, by way of Level 3 Communications, a toll before allowing them to deliver their wares to Comcast subscribers. On Comcast’s corporate blog this morning, the company’s Senior Vice President of External Affairs and Public Policy Counsel Joe Waz argues his employer’s dispute with Level 3 Communications is the result of Comcast’s not getting back as much as they are giving:

"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 [other ISPs] public statements, reasonable, balanced, 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 on someone else's network."

This would be a reasonable position, were the issue at stake one surrounding the exclusive business dealings of the two companies. However, that’s not what we have here. Comcast isn’t holding access to their network hostage because of anything that Level 3 Communications or Netflix has done to them. They’re enforcing a toll on content that their internet service provision customers have already paid for. If Level 3 Communications hadn’t agreed to pay Comcast’s ransom, it’s very likely that the ISP’s customers would be cut off from Netflix by now. That’s not good business.

It’s not even smart business.

It’s saying that your bottom line is more important than your customer’s desires. In the end, that kind of behaviour could end up costing them more from lost consumer revenue than they could ever made off of any tariff they felt fit to charge another business. This is why net neutrality is so important. When private interests are left to decide how and what the paying public can access via the internet, everybody loses.

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