Comcast Steals Netflix Provider Level 3′s Lunch Money

Comcast has started charging Internet backbone provider Level 3 Communicationsto deliver streaming Netflix services to customers. Consumeristhas the story:

Here’s the deal: recently Level 3 outbid Content Delivery Network provider Akami to handle bringing streaming Neflix video.

Lacking leverage, Akami paid Comcast a traffic delivery fee. Level 3 doesn’t want to keep paying the fee. Comcast says they better pay the toll, or they can’t cross their bridge.

Comcast called Level 3′s claims“duplicitous,” saying,“Comcast has long established and mutually acceptable commercial arrangements with Level 3′s Content Delivery Network (CDN) competitors in delivering the same types of traffic to our customers. Comcast offered Level 3 the same terms it offers to Level 3′s CDN competitors for the same traffic. But Level 3 is trying to gain an unfair business advantage over its CDN competitors by claiming it’s entitled to be treated differently and trying to force Comcast to give Level 3 unlimited and highly imbalanced traffic and shift all the cost onto Comcast and its customers.”

Industry analyst Dave Burstein told Consumerist,“The Justice Department should step in with antitrust.”

So the biggest cable company in the US is charging a backbone provider a Netflix-specific fee.“Netflix accounts for more than a fifth of the traffic downloaded during the peak hours of 8 p.m. and 10 p.m. in the U.S., according to a report from broadband network company Sandvine Inc. Level 3 has said it will add capacity to its network to handle the extra load from Netflix’s movies,” writesBloomberg. That means more“toll” money for Comcast, the salivating bully of the telecom world. More from Bloomberg:

Level 3 plans to complain to U.S. regulators who may enact so-called net-neutrality rules next month. The Federal Communications Commission is seeking to bar phone and cable providers from interfering with legal traffic on their networks. The rules are backed by President Barack Obama and companies led by Google Inc., EBay Inc. and IAC/InterActiveCorp. Phone and cable companies say rules aren’t needed and may hurt investment.

The move also comes as Comcast awaits FCC and Department of Justice approval to buy a majority stake in NBCU.

Comcast sure isn’t making many friends right now.

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SMB Owners Still Not Sure About Social Media

While your eyes were on Thanksgiving, eMarketerreported onaRatePoint survey from August 2010 that shared two pretty disheartening statistics about small business owners and their views on social media. Curious what they were? According to RatePoint:

• 47 percent of SMB owners eitheraren’t sureordon’t thinktheir customers spend time on social media sites.
• 24 percent of SMB owners don’t think their customers do research online before finding them.

Ouch.

If you’re a small business owner and you don’t think your customers are spending time on social media, I’d really encourage you to get out of your storefront and have a look around–because there’s an entire world passing you by. Earlier this year, Nielsen reported that the world now spendsmore than 100 billion minutes on social networks and blog sites, equating to 22 percent of all time online, or one in every four and a half minutes.

Where are those users hanging out? Well, Facebook crossed the500 million member markback in July, andTwitter has more than 100 million registered users, with 30,000 new people signing up every day. Peopleareusing these networks, and your customers are guaranteed to be among them. If you’re not there, it means you’re ignoring customers (and potential customers).

Still not convinced?

Local search company15milespartnered with comScore to measure consumers’ search behaviors and how they were interacting online in theLocal Search Usage Study. What they found was that that the ROBO effect (Research Online, Buy Offline) was very much still in place. According to their data, consumers in all age ranges prefer to go online first when looking for local business information.

More than that, establishing a presence in social media helps to establish credibility for a small business. Sixty-nine percent of consumers say they’re more likely to interact with and use a local business if they can find it on a social networking site. As an SMB, being present on these sites is a huge differentiation and trust source. People like doing business with companies on social media because they know that if they encounter a problem, there will be someone there to help them. It means the company is easily accessible. More than just being on social media, consumers want an SMB to establish a real presence there.

For example:

• 81 percent say it’s important for businesses to respond to a post.
• 78 percent want to see promotions.
• 74 percent want regular posts.
• 66 percent want to see pictures.

It’s surprising to me that at the end of 2010, nearly half of SMBs still aren’t sure their customers are using social sites to interact with brands and get trusted information. A few months ago, Danny Sullivan wrote about the“anyone know?” search, where consumers are routinely using sites like Twitter to get product-based recommendations. For example, you’ve probably seen tweets like, “Anyone know where to get a good slice of pizza?” or “Anyone know a good mechanic?” These are big opportunities for small business owners to convert new leads and build awareness.

Whether or not you think your customers are using social media, they are. The ability SMB owners have to reach out to consumers where they’re naturally hanging out is substantial, and it’s something you have to pay attention to. The Web is only going to get more social, not less.

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