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What the Comcast – Level 3 conflict means for radio

In a textbook example of the abusive power of a near-monopoly, the ‘net was set ablaze yesterday upon the news that major internet backbone provider and content distribution network (CDN) company Level 3 called out cable-modem internet service provide Comcast for demanding additional fees for delivering video and other content to Comcast customers. Comcast’s demands come on the heels of Level 3 inking an agreement to become the exclusive US distributor of Netflix “watch instantly” streaming movies and television programming. Quite obviously, Comcast is also in the television business, causing many a public interest advocate to see this action as an anti-competitive move, and just the sort of thing that happens when there are no network neutrality protections for internet content.

While this case has to do with video content specifically, how things turn out will have implications for all types of content on the internet, including radio.

You see, the internet has historically operated based upon peering agreements. That is, one service provider connects to another under the agreement that each will transmit content that originates on the other’s network. As a backbone provider, then, a company like Level 3 would agree to freely transmit content that originates on an ISP’s network in exchange for the ISP delivering Level 3’s content to its customers. At its core peering is supposed to be non-discriminatory, where bits are bits, and it doesn’t matter whether those bits are text, graphics, audio or video. But with Comcast one can only conclude appears that the fact that Level 3 is transmitting video is at issue. In fact, industry expert Dave Burstein tells ArsTechnica’s Nate Anderson that, “As far as I know, no primary backbone provider like Level 3 has ever been required to pay to deliver traffic to another major carrier.”

Level 3 says that it “believes Comcast’s current position violates the spirit and letter of the FCC’s proposed Internet Policy principles and other regulations and statutes,” and therefore is asking for scrutiny by regulators and legislators. For his part, on Tuesday FCC Chairman Julius Genachowski told reporters that, “It would be premature to comment on it without knowing what the facts are. The staff is looking into it.”

While streaming a Netflix movie consumes anywhere from 5 to 10 times the bandwidth of listening to an online radio stations, a victory for Comcast in this matter might cause the company to start looking to hit up services like Pandora or–which each have significantly larger audiences than Netflix–for additional fees. Such fees could seriously affect the ability of these services to continue to offer free options, or raise the cost of their pay service.

More significant is the threat to smaller webcasters, whether they’re noncommerical stations like WFMU, commercial stations like Indie 103, or a large streaming radio host like Live 365. Even though most stations won’t deal directly with Comcast, any that serve a sizeable online audience use a third-party streaming host or CDN that will have to deal with Comcast directly or via a third party. Eventually any additional fees that Comcast charges will get passed along to the station.

Netflix and Level 3 are big enough companies that they can ill afford to walk away from Comcast’s nearly 16 million internet customers. But such fees might be enough to make it too expensive for a smaller webcaster to serve Comcast customers, forcing them to limit or eliminate service to them. This could lead to Comcast internet customers having less diversity to choose from. Of course, households that can choose a different ISP would be able to do so, but too many broadband consumers in the US don’t have a second ISP to choose from.

A more damaging outcome would be if other ISPs decided to follow Comcast’s lead, driving up costs for all webcasters. One of the most revolutionary aspects of internet radio is its low barrier to entry. Any effort by ISPs to impose fees on audio or video traffic delivered to their customers would threaten this advantage, likely harming noncommercial and smaller webcasters. Large, corporate-backed webcasters, like Pandora, will probably withstand the fees, just like it seems Netflix will. But the overall diversity of web radio will suffer.

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