Comcast Not Alone in Sending Cable Channels to Xbox 360s

What sets Comcast apart is it’s one of the few MVPDs delivering streams to IP-connected devices that don’t count toward caps, which limit the amount of online video and all other data from other sources Internet subscribers can consume without paying more, our research found. Verizon and AT&T stream IP video to the Xbox 360. Verizon, which doesn’t have data caps, offers VOD titles and some of its FiOS TV linear channels to Xbox 360 users. AT&T has usage-based caps and offers its whole U-verse TV service lineup with the addition of a $99 hardware upgrade. Neither telco had any comment. Comcast offers just its VOD titles, including HBO programming and the cable operator’s new Streampix premium-level streaming service, to Xbox 360 users. Comcast executives say they're looking at adding live TV channels to the Xbox 360.

The net neutrality issue could be difficult to settle for IP video feeds to connected devices, especially if ISPs use their own private networks to deliver the video content, fans and foes of FCC net neutrality rules agreed. “It will be a while before that’s sorted out,” said Associate Director Ryan Radia of the Competitive Enterprise Institute, a net neutrality opponent. “It’s likely other providers will take a let’s-wait-and-see approach,” he said. “If Comcast doesn’t find itself at the wrong end of the regulatory stick, then other providers will likely follow suit.”

It’s not clear the FCC’s 2010 net neutrality order prohibits ISPs from imposing data caps and exempting their own IP video offerings from them, said senior staff attorney Michael Weinberg of net neutrality rule backer Public Knowledge. Comcast’s actions “certainly violate the spirit of net neutrality” and the overarching vision behind the rules, he said. PK is still investigating (http://xrl.us/bm58vu) whether to file a formal complaint with the commission, Weinberg said. Nonprofits’ concerns over Comcast’s IP streaming is Washington advocacy “run amok” and shows that no “good deed” -- not counting the streaming toward data caps -- “goes unpunished,” NCTA CEO Michael Powell wrote on the association’s blog in late March when PK’s concerns were first raised (http://xrl.us/bm58v). “The FCC in crafting its net neutrality rules expressly allowed this type of service, which does not use the public Internet, recognizing it would be good for innovation and good for consumers.” Comcast had no comment.

"Since its adoption in 2010, the Commission’s balanced open Internet framework has given participants in the broadband economy the certainty they need to continue to innovate and invest, contributing to a surge of economic activity and growth,” an FCC spokesman said by email. “The Commission continues to monitor this space, and takes seriously any allegations of violations of our open Internet rules."

A Sony executive reportedly joined the chorus of critics last week, which net neutrality backer Free Press pointed to in criticizing Comcast’s practice. Concerns about Comcast’s IP video policies and bandwidth caps are giving Sony second thoughts about starting its own Internet video service, Sony Entertainment Network General Manager Michael Aragon told a conference in a report Free Press cited. Sony’s “waiting on clarity” from regulators about whether Comcast could spare its own video services from the caps, Aragon told a conference according to a report by conference sponsor Variety. “These guys have the pipe and the bandwidth,” he reportedly said. “If they start capping things, it gets difficult."

"Sony’s concern should serve as a wake-up call to policymakers at the FCC and in Congress,” Free Press Policy Director Matt Wood said. “Comcast’s unnecessary, arbitrary and discriminatory data caps are holding back innovation and competition in the video market. Caps simply don’t do anything to manage supposed network congestion. Sony says it’s waiting for clarity from regulators; now it’s time for the FCC and Congress to give innovators the certainty they need by signaling they will not tolerate discriminatory use of data caps.” A Sony spokeswoman had no comment.

Comcast has no plans to “introduce usage-based pricing” for over-the-top video providers, Comcast Cable CEO Neil Smit said on a Q1 earnings conference call. Netflix, which has criticized Comcast’s caps, “articulated in their earnings call that our data thresholds don’t really impact their Netflix users at this point,” Smit said. Netflix CEO Reed Hastings lashed into Comcast for allegedly violating net neutrality rules. “Comcast should apply caps equally, or not at all,” Hastings wrote recently.

Time Warner Cable, introducing usage-based data pricing plans in south Texas and other parts of the U.S., is also transmitting its IP video content over its own private network. Like Comcast, Time Warner Cable doesn’t intend to count IP video consumption against the monthly data limits of broadband subscribers who opt for the usage-based pricing plans. “If we happened to encode the video in MPEG-2, nobody even thinks to ask the question,” Time Warner Cable CEO Glenn Britt told investors recently. “The fact that we choose to have another feed that’s encrypted in IP shouldn’t really change the outcome."

The FCC won’t likely go after Comcast on net neutrality, especially after losing an earlier case in the U.S. Court of Appeals for the D.C. Circuit over the agency’s censure of the cable operator for slowing peer-to-peer traffic, Radia said. “It would be an unusually brazen action for the FCC to take,” he said. “It would seem more likely that the FCC would go after a more egregious violator. ... If they're enforcing a controversial and legally dubious regulation, it’s probably smarter to go after a company that everybody agrees is doing something bad.” Analyst Carlos Kirjner of Sanford Bernstein noted the net neutrality order “explicitly and unambiguously endorses usage-based pricing” and exempts IP video services like Comcast’s Xfinity app for the Xbox.

As MVPD IP video streaming moves ahead, a key non-regulatory obstacle remains: lack of content rights outside the home. Stymied by their restrictive content licensing contracts with programmers, nearly all MVPDs limit their video streaming to in-home devices. Even more so than videogame consoles, MVPDs have focused IP video streaming efforts so far on tablets, particularly iPads, our research found. Comcast, Time Warner Cable, Cablevision, Cox Communications, Bright House Networks, Verizon, AT&T, DirecTV and Dish Network stream live TV programming to the iPad. Most, if not all, of them are also streaming on-demand content to the iPad. Other MVPDs like Charter Communications, Suddenlink and RCN, and Virgin Media in the U.K., may rely on TiVo to stream video programming to the iPad in the near future. Those cable operators have secured deals with TiVo to distribute VOD and over-the-top video service.

MVPDs in recent months have also boosted efforts to stream IP video programming to computers. In February, Time Warner Cable introduced a TV app for PCs, Macs and laptops. The app offers access to about 200 live TV channels, an integrated program guide, remote DVR management and the ability to turn the computers into big-screen remote controls for digital set-tops. Cablevision launched its new Optimum App for Laptop last month, enabling customers to watch hundreds of linear TV channels, use interactive program guides and program their DVRs. MVPDs have also begun streaming IP video content to smartphones, especially iPhones. Comcast, Time Warner Cable, Cablevision and Cox all feed some kind of video programming to the iPhone. In mid-January, for instance, Time Warner Cable started making more than 130 live TV channels available to iPhone users. Cable programmers streaming IP video to the Xbox 360, tablets, PCs, smartphones and connected TVs include HBO, Showtime and ESPN. Netflix, YouTube, Hulu and Epix are also streaming IP video to Web-connected devices.