Cash offered to big incumbent ISPs to upgrade bandwidth

by Steve Blum • , , ,

The fight over who pays for the Internet has moved deeper inside the network. Cogent and Level 3 are two companies that provide much of the backbone transport for major last mile Internet service providers like AT&T, Comcast and Verizon. They’re accusing the big ISPs of, in effect, holding millions of consumers hostage in order to force others – backbone companies and content providers like Netflix, in particular – to pay the cost of upgrading their systems to support the continuing boom in Internet traffic.

Both Cogent and Level 3 have asked the FCC to do something about it. But Cogent is also putting money on the table, offering to pay for the capital costs of upgrading ISPs connections to its network. In a press release, the company tries to draw a line between that offer and the pay-for-play arrangements that are at the heart of the current network neutrality debate in Washington…

Cogent is simply willing, at this time, to incur the capital costs associated with augmenting its interconnections with these networks to address the current level of traffic congestion. Cogent believes that these major telephone and cable companies are attempting to leverage their monopoly on broadband residential Internet connections to increase their profits by imposing tolls on traffic requested by their customers and delivered by other Internet service providers.

AT&T’s senior in-house lobbyist, Jim Cicconi, has fired back, using Netflix as an example and saying that if you watch a movie, you should pay for the cost of delivering it…

When Netflix delivered its movies by mail, the cost of delivery was included in the price their customer paid. It would’ve been neither right nor legal for Netflix to demand a customer’s neighbors pay the cost of delivering his movie.

There’s much more behind the debate; if you’re interested Ars Technica has an excellent article summing up the recent back and forth.