Comcast has been accused of erecting a roadblock to extract more money for streaming movies from Netflix. This arrives in the wake of the streaming-only plan recently announced by Netflix; it raises new concerns about broadband Internet providers blocking or limiting access from competitors in the program delivery business.
The new charge comes from Level 3 Communications, which earlier this month won a contract to provide streaming and storage services for Netflix, beginning on January 1. The contract is not exclusive, but Level 3 said it would double its storage capacity in anticipation of the increased business. Shortly thereafter, Comcast demanded a new recurring fee from Level 3. Level 3 agreed under protest, but now plans to approach regulators and policy makers to plead their case.
For their part, Comcast says that Level 3 is "trying to gain an unfair business advantage" over its competitors in the content delivery business, shifting the cost of increased business "onto Comcast and its customers instead of Level 3 and its customers." As explained by TechCrunch, Level 3 acts as both a backbone and a content delivery provider. Comcast also plays multiple roles: as an Internet / cable provider and as a content provider. What does all this mean for movie-lovers?
It means that we've gotten the message: Streaming is no longer the future, it's the present. According to a research report, Netflix already consumes 20% of peak period Internet bandwidth. Streaming, when it works, is a joy to behold. That's the key: you must have a good broadband connection and the content provider must have sufficient capacity. Otherwise, Netflix Watch Instantly (or any other similar service, now or in the future) is a frustrating, painful experience that sends you scrambling back to physical media.
Netflix knows this, obviously, which is why they signed a new contract with Level 3. Having agreed to those terms, Level 3 doesn't want to pay any more money to Comcast. And Comcast wants someone else to pay for traffic that doesn't benefit them directly.
TechCrunch concludes that "it's cases like this that will help decide who pays whom for what and, as we all know, we'll end up paying in the end." The question then becomes: How much money -- and how many companies -- do you want to pay to watch streaming movies at home?