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Fair Is Fair

1/17/2011 12:01 AM Eastern

Anyone who cares about network
neutrality should be closely watching the
dispute between Comcast and Level 3 Communications.

As Todd Spangler points out this week (see
“Level 3 May Test ‘Open Net’ Rules,”), the dispute has vast implications for all
Internet network providers and content

If Level 3 convinces the Federal Communications
Commission and Justice Department
regulators that Comcast shouldn’t levy fees
on networks that pass on a disproportionate
amount of data, it changes the business model
of traffic interchange on the Internet.

In filings with the FCC, Comcast makes a very a persuasive
case that the Level 3 case is a simple business dispute
resulting from a “peering” arrangement. Moreover, it says
it’s only fair that Level 3 should pay to send more traffic
(double the normal amount) on its network.

Comcast noted in FCC filings that many companies
“sought to use this particular transaction-review process
to advantage themselves in business dealings,”
and Level 3 is no different. But the questions
raised by Level 3 warrant closer scrutiny, not
as they relate to the NBCU deal, but to determine
how precisely such future cases will be

In a similar case in a different medium,
another group, Free Press, is asking the
FCC to investigate mobile Internet provider
MetroPCS’s new usage-based pricing plan
on grounds it may violate new rules (which
aren’t in effect yet) prohibiting the blocking of
Internet-content providers.

These cases are only the first. Because the
FCC has proposed enforcing its new regime of
Internet rules on a “case-by-case basis,” and is calling on
all websites to report any net-neutrality transgressions,
broadband providers can expect a healthy rate of complaints
each time a price dispute comes up.

At the heart of each of these cases is a pertinent question
that the FCC will have a devil of a time answering:
What’s a fair price?