Level 3 Alleges Net Standards Abuse by Comcast (LVLT, CMCSA)

Level 3 Communications

fired a legal warning shot against Comcast

Monday, alleging violation of federal internet standards. Comcast informed Level 3 earlier this month that it would collect a fee for transmission of some web content. Level 3 recently announced a network partnership with Netflix

, and the move would most certainly affect the company's bottom line. According to a Reuters report, "Level 3, which recently won a deal to help popular movie streaming service Netflix deliver its shows to consumers, said in a terse statement released late Monday that Comcast's demand of a recurring fee for content transmission amounts to the company setting up a "toll booth at the borders of its broadband Internet access network." "On November 22, after being informed by Comcast that its demand for payment was 'take it or leave it,' Level 3 agreed to the terms, under protest, in order to ensure customers did not experience any disruptions," the statement said. Further, "While the network neutrality debate in Washington has focused on what actions a broadband access provider might take to filter, prioritize or manage content requested by its subscribers, Comcast's decision goes well beyond this. With this action, Comcast is preventing competing content from ever being delivered to Comcast's subscribers at all..." the release commented. The Reuters report notes that "The move could potentially have big ramifications for Comcast's proposed take-over of NBC Universal, which is currently being reviewed by U.S. regulators. Comcast has said it expects the merger is expected to close by year-end. NBC Universal is the parent company of CNBC.com." Shares of Level 3 closed Monday at $1.00. Comcast stock closed at $20.21.