Another pair of former opponents has inked an Internet interconnection deal. According to a Comcast press release, Comcast and Level 3 Communications have reached a “multi-year bilateral interconnection agreement” that is part of a “multifaceted arrangement that will help both companies meet their customers’ needs into the next decade and beyond.” The companies aren’t saying whether the agreement calls for any money to change hands.
For several years, content providers such as Netflix and companies such as Level 3 that provide backbone connectivity for content providers have been complaining about their Internet interconnection or peering agreements with some of the larger consumer broadband providers such as Comcast. The broadband providers have argued that they receive more traffic from companies like Level 3 than they send to them and therefore should be compensated – and if an interconnection partner balks at paying, the broadband providers allegedly have refused to upgrade their network connections to accommodate growing traffic volumes.
Several high-profile disputes caused the FCC to get involved – and the commission appeared to side with the content providers and the network operators serving them. When the commission adopted new Net Neutrality rules in February, it added a provision to oversee Internet interconnection agreements. That provision was not included in an earlier version of the Net Neutrality rules that was struck down in 2014.
Peering Dispute Resolutions
Broadband providers seem to be taking the threat of possible FCC intervention seriously. Since the latest Net Neutrality order was adopted, various companies that previously were at odds with one another have signed interconnection deals. For example, broadband provider Verizon recently reached interconnection agreements with two of its opponents – Cogent Communications and Level 3 – and a Cogent executive reportedly said the Cogent deal did not involve a monetary exchange.
Broadband providers are hoping the latest version of Net Neutrality rules will again be struck down in a legal challenge, as evidenced by comments of AT&T CEO Randall Stephenson at a financial conference this week. But a legal challenge could take years, leaving plenty of time for interconnection agreements to become firmly embedded in network operators’ business processes.
As FCC Chairman Tom Wheeler said in an address at the recent Internet & Television Expo show, the likely outcome is that there will be no going back on Internet interconnection agreements.