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Comcast deal gives it market power on Internet backbone, critic says

Grant Gross | May 9, 2014

This week, backbone provider Level 3 accused six unnamed broadband providers — five U.S. and one European — of deliberately allowing congestion on their networks in an effort to extract payments from widely used Web services.

The backbone peering controversy is also tied to an outcry in recent days after FCC Chairman Tom Wheeler announced new net neutrality rules that would allow broadband providers to engage in commercially reasonable traffic management. Many consumer groups and Internet companies have called on the FCC to pass stronger rules that would prohibit pay-for-priority traffic arrangements.

Several committee members said they are concerned that the Comcast acquisition of Time Warner could raise cable or broadband prices, or give Comcast an incentive to discriminate against online content that competes with its own NBC networks and on-demand video service.

While it may be difficult to kill the deal using existing antitrust law, it raises questions about Comcast's competition with Web-based video, said Representative Darrell Issa, a California Republican. Old antitrust questions may not cover the issues raised in this merger, he said.

Issa questioned if net neutrality rules Comcast agreed to during its 2011 acquisition of NBCUniversal would require the company to carry Netflix through its X1 on-demand video service, delivered through a TV set-top box.

"You are a major buyer and reseller of content," he told Cohen. "You are a major owner and developer of content, and your in-house products compete against products that you may choose to buy."

Video delivered through set-top boxes is not covered by that agreement, Cohen said. The X1 is a cable service, not a broadband service covered by net neutrality, he said.

Congress needs to have a "robust discussion" about market access and video competition, Issa said. The cloud-based X1 service allows Comcast to deliver "anything video to that one unit, and there's really no difference in the bandwidth asked for," he said. "There's only a difference whether I'm using a product recorded online or I'm using a different product."

 

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