Netflix is a bandwidth hog. Who will pay?

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Netflix is clogging up the Internet. There's a debate raging about who should pay for it -- but ultimately, it's going to be you.

The latest skirmish is a fracas between Comcast, which connects users to the Internet, and Level 3, which signed a deal three weeks ago to host and deliver Netflix's streaming videos to networks like Comcast's. Comcast ultimately delivers those videos to its paying broadband customers. The explosion of online video -- especially the movie-length content Netflix spotlights -- isn't an easy problem to fix. The amount of video watched online has nearly doubled in a year, to 15.1 hours per user per month, according to comScore. It is costs increasingly more to host and serve that content, and to build the infrastructure for the bandwidth that allows users to download it.

Someone has to pay for that. But who should it be? That's where it gets sticky: Both Comcast and Level 3 are playing on both sides of the fence. In addition to being one of the world's largest CDNs, Level 3 is also a so-called "tier 1" Internet backbone. It's one of around a dozen companies that provides major routes for data to flow between networks like Comcast and content networks (including its own) that host websites and videos. Level 3 squawked loudly about Comcast's fee demand, calling it a "clear abuse" of Comcast's market position and an act that "threatens the open Internet."

Yet Level 3 found itself in Comcast's shoes back in 2005. Feeling its peering agreement with fellow Internet backbone Cogent Communications unfairly taxed its network, Level 3 made the exact same argument that Comcast is making today, and even temporarily pulled the plug on its connection to Cogent, cutting off some parts of the Internet for millions of Cogent customers. Comcast is also playing on both sides of the argument, since it is a competitor to Netflix. It owns several cable channels and is in the process of buying NBC Universal.


Netflix is a bandwidth hog. Who will pay?