Groups Cheer Reports of DOJ Antitrust Investigation into Cable
Nonprofits hailed a reported Justice Department investigation of how cable operators price broadband service and treat traffic from online media providers. Spokesmen for the FCC and Justice Department declined to comment on The Wall Street Journal report. The DOJ and FCC are looking into the extent to which Comcast has been complying with or violating the terms of its consent decree that paved the way for its purchase of control of NBCUniversal, an industry source said. The investigation is wide-ranging and has involved a variety of companies involved in streaming media, the person said. That was welcome news for some public interest groups.
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"The future of online competition for cable is being decided right now, and it is crucial that government agencies responsible for protecting the public interest do so,” said Harold Feld, Public Knowledge’s legal director. Free Press Policy Director Matt Wood said broadband usage caps “can discriminate against competitive online video services.” Even without discriminatory treatment, usage caps “generally discourage customers’ use of services delivered over the Internet,” he said.
The reported investigation could slow cable industry plans to distribute more of its services by Internet-Protocol video, Sanford Bernstein analyst Craig Moffett wrote investors. Comcast came under fire recently from Netflix because the cable did not count its own IP Xfinity traffic to customers Xboxes against its 250 GB monthly data cap. Comcast since did away with that cap and has said it is exploring new ways to price broadband. “In effect they allowed the Xbox to serve as a substitute set-top box,” Moffett wrote. “The additional scrutiny is likely to reduce MSOs’ [multiple system operators'] incentives to experiment,” he said. “Regardless of who is ‘right’ we believe the risk of being perceived as discriminatory will lead to a reduced willingness to make feeds like Comcast’s IP video stream available to others, whether Apple or Google or anyone else."
A slowdown from pay-TV distributors in that regard would be an unexpected reversal as they have shown themselves to be very interested in putting their content on more IP platforms, Roku CEO Anthony Wood said at the TV of Tomorrow show in San Francisco Wednesday. “In my talks with companies in the industry, cable operators and cable networks are generally super enthusiastic about their content [being available] on an authenticated basis,” he said. “I don’t see anything slowing that down,” he said. “I know what we have working in our labs and the deals we've signed and it’s going to be a huge factor in the industry over the next couple of years."
Cable operators are trying to make sure customers get the highest value for their subscription, an NCTA spokesman said. “Consumers are the beneficiaries of tremendous choice, competition, and innovation in the video marketplace with dozens of alternatives now available for viewing content on multiple devices,” he said. “The innovative offerings by cable companies are positive developments for consumers and represent accepted and legitimate business practices as well as sound network management."
Companies are allowed to discriminate against competitors under antitrust laws unless this harms consumers, TechFreedom President Berin Szoka said. “Would consumers really be better off if their cable viewing reduced the amount of data available for streaming competing online video services?”