The U.S. Justice Department will investigate whether cable television providers have violated antitrust laws by blocking competition from streaming services like Netflix and Hulu, according to recent reports from Bloomberg and the Wall Street Journal. The companies coming under DoJ scrutiny include Comcast and Time Warner Cable.
The issue at hand is purportedly whether these cable giants use their status as major service providers of both television and Internet to unfairly make deals with content providers in Hollywood. Further, the investigation will look at how tiered broadband plans (and the data caps that come with them) affect services like Netflix, which rely upon a high-speed Internet connection to deliver its services to subscribers. If the companies are found to have used their position as gatekeepers for television content, or purposefully instituted certain Internet access plans to hamper video streaming services, then they would be in violation of the law.
So far, neither Comcast, Time Warner Cable, Neflix, nor Hulu (which is partly owned by Comcast/NBCUniversal) have commented on the DoJ’s alleged investigation. The Justice Department has not yet commented either.
The as-yet unconfirmed DoJ probe follows Sen. Al Franken’s (D-MN) assertions to the Federal Communications Commission that Comcast’s Xfinity video streaming service, which allows its customers to stream on-demand video to the Xbox 360, violates Net neutrality rules by disregarding its own data caps for videos streamed through Xfinity, while still applying broadband used for Netflix to those caps. Netflix CEO Reed Hastings has made the same allegations.
“Comcast [is] no longer following net neutrality principles,” Hastings wrote on his Facebook page in April. “Comcast should apply caps equally, or not at all. I spent the weekend enjoying four good Internet video apps on my Xbox: Netflix, HBO GO, Xfinity, and Hulu. When I watch video on my Xbox from three of these four apps, it counts against my Comcast Internet cap. When I watch through Comcast’s Xfinity app, however, it does not count against my Comcast Internet cap. For example, if I watch last night’s SNL episode on my Xbox through the Hulu app, it eats up about one gigabyte of my cap, but if I watch that same episode through the Xfinity Xbox app, it doesn’t use up my cap at all. The same device, the same IP address, the same Wi-Fi, the same Internet connection, but totally different cap treatment. In what way is this neutral?
The DoJ’s alleged investigation will include a focus on this issue.
The investigation will also reported look at whether content providers’ practice of offering cable companies far lower prices in distribution deals is a good business practice, or whether it is specifically designed to stifle competition with streaming services like Netflix.
It will be extremely interesting to watch how this investigation plays out — if it’s happening at all, though that seems highly likely to us. If the Justice Department rules against the cable companies, it may have profound repercussions for the cable industry, which has so far moved into the streaming age kicking and screaming. For those of us who wish to “cut the cord” as soon as possible, without having to sacrifice access to content, we’ll have our fingers firmly crossed while this process plays out.
Investigate Verizon for having a monopoly on wireless data service. They charge excessive rates and allow too low bandwidth. It is clear collusion between the satellite, cable TV, and the wireless voice/data service provider to keep the profits flowing and to keep people subscribed to cable TV service that is full of crap and annoying commercials.
Who Cries for Hulu?
Most people will miss this, but Hulu, TV everywhere, and Ultraviolet limit the flow content in the market.
I’m also often amused, when I hear of how Hulu could be negatively “stifled” by Comcast data caps, or rising content costs. I understand NETFLIX vs COMCAST (OR TW). But Hulu isn’t at odds with COMCAST any more than I’m at war with my left arm.
TW considered joining Hulu, and still produces programs for multiple networks. That same content ends up on Hulu. I also like how they discuss Hulu content costs to license to themselves. One thing that NETFLIX and Hulu have in common is that both have limited or no “premium” content. Less availability, with increasing costs in the face of legitimate consumer demand, does sound suspiciously like artificial inflation of value, and may have created this probe in the first place.
Yet, I still laugh when I read how DoJ investigators are questioning Hulu, among others; about their business being “stifled” by content owners and ISPs. Three of the six content owners below comprise Hulu. Others were solicited. They decide what content they get, and the price.
They’re now supposedly speaking to the DoJ about pesky bandwidth caps implemented by (their partner) Comcast? Also, remember how Hulu was too valuable to sell? Was that all by design? Wasn’t HULU designed to limit the flow of content? Even NETFLIX is in a fight for it’s life. But are we really worried for Hulu? Please.
http://www.linkedin.com/in/networkx
“I spent the weekend enjoying four good Internet video apps on my Xbox: Netflix, HBO GO, Xfinity, and Hulu. When I watch video on my Xbox from three of these four apps, it counts against my Comcast Internet cap. When I watch through Comcast’s Xfinity app, however, it does not count against my Comcast Internet cap.”
I love this. So well said.
However, Hastings has built a company that relies on another for-profit company’s business model. So therefore, tough to-nails. Deal with it.
These ISP’s are not utility companies in the same sense that an electric or water company is. I don’t know about most people, but I have the option to get water from one company, and electricity from one company. I can however, choose which ISP or phone company I use. That’s because the internet is not a utility company. So if Hastings doesn’t like it, maybe he should start up an internet company eh? There are smaller ISPs that use the backbones of larger ones, so it should not be out of the question for him.
With that being said, Hastings does have a point that Xfinity/Comcast is not following net neutrality rules. They are being hypocritical because, well, it benefits them. If you own the broadband and you have customers paying for your product, then why would Comcast charge their own customers twice? Or count their broadband usage against them for watching a show on Comcast’s own VOD product?
As a customer that has Verizon FiOS and doesn’t use Netflix, I would be pissed if Verizon was forced to charge me more for something I’m already paying for, or if they data capped me when watching VOD on their own network just because Netflix or Hulu forced the FCC to make that a rule. That’s BS.
My point is that a company like Verizon or Comcast should not be in the content business to begin with. This creates an extreme conflict of interest and fosters anti-competitive behavior. Personally I like to keep my content and my pipes distinct. I don’t mind paying more money for extra bandwidth provided I have the freedom to choose my content. I should disclose that I would favor ISP’s being treated more like a utility as information has become just as much a daily utility as electricity. Look at it this way, i could survive (in the technical sense) without electricity just like i would not ‘die’ of boredom without netflix but when something reaches the ubiquity like the internet has then I don’t think it’s not unreasonable to have some basic expectations from the providers, such as equal access to services. So when you look at it from that angle you can see why these types of monopolistic practices ruffle some feathers. I’m not interested in my cable providers hand picked and potentially censored content catalog much in the way i’m not interested in using the web browser that comes bundled with my operating system. You don’t see Microsoft charging me extra to use a different browser (although i’m sure they would if they could). So if Microsoft can get slammed for monopolistic practices for far less, why not the telecomm companies? Seriously wtf.
But Verizon and Comcast are cable companies. They ARE in the business of providing content to people.
Looks, I’m all for the FCC tell Comcast not to cap anyone’s usage. I just worry that if the FCC tells them to treat everyone equally, then Comcast WILL decide to cap users bandwidth because they can. And I certainly don’t want that to happen.
Remember when you were a kid and you wanted to tattle on your brother? And then you learned that if you tattled, you would both get punished? That’s what I don’t want to happen to me!
I think your argument holds water when applied to broadcast content – historically they’ve hand chosen networks (note i said networks and not individual shows) to bundle with their service tiers but i think there is a distinction when cable providers start tampering with IP based services (such as streaming video). There is a conflict of interest between being a content provider AND an ISP. The responsibility of an ISP is to provide a blind transport for data packets. Outside of minimal traffic shaping for the sake of quality of service an ISP should never outright censor or create tiered fees for different types/sources of data (this is the very definition of net neutrality). As a hybrid content provider/ISP, companies like Comcast and Verizon are crapping all over net neutrality by destroying this distinction all while providing crappier service (less and/or censored content) and harming competition.
Ok, so with that argument being said, Comcasts VOD product is only available if you are a Comcast cable subscriber, not an internet only subscriber.
I think the confusion sets in when people blur the lines and say that because Comcast delivers their TV service over the same infrastructure as their internet service, then that means they are both a content provider and an ISP.
The ONLY issue I have with Comcast is that they do not cap users of the Xfinity desktop app which runs on their internet product. That should be capped just like Hulu and Netflix.
So if Comcast does decide to include the Xfinity product in their cap, would that make you and Reed Hastings happy? Probably not right? But at least that would take your’s and Hastings valid argument and throw it out the window. Then Comcast wins.
But I suppose the argument would still go on and we would still want the FCC to tell Comcast not to cap anyone right? Not sure what ammunition we would have at that point then.
The only good that will come of this is separating the content delivery from the content creators. We know that won’t happen anytime soon.
Which means, either video apps will be exempted from the bandwidth caps (and that opens a flood gate.. youtube anyone?) or Xfinity’s app will be counted towards the cap.
In the short term, I don’t see consumers winning – BUT it is a good thing the DoJ is taking notice now and not when it’s rampant across the cable industry.
It’s a relief to hear that the DOJ is finally catching on to the shenanigans that us educated folk have been SCREAMING about for the last 3 years. This is exactly what us net neutrality proponents were warning about when comcast was attempting to buy NBC and when Google was getting cozy with Verizon and when AOL merged with Time Warner! When the same company has a vested interest in both content and the pipes what did you really expect to happen!? It became clear very quickly because of the rampant bribery that happens in congress there was never gonna be a legislative solution to this problem. I hope we see more than lip service from the DOJ and I’d really like to see some foresight for problems like this long before us little folk start getting gouged. Sheesh.
So don’t use their products if you don’t like them. You have a choice. I don’t use Netflix or Hulu, so I am perfectly happy as a FiOS customer that I am not being capped for data when watching Verizon’s VOD programming. I would be pissed at YOU if you forced me to be capped so you can watch your Netflix or Hulu and pushed the FCC to treat these companies to be equal.
I don’t really consider it a choice if ‘all’ cable providers are doing this, that’s like saying go to a different gas station if you don’t like the fact they are putting water in your gas when ‘every’ single gas station is doing that (hypothetical comparion).
But is every ISP doing this? Not from what I can tell. Comcast is the shadiest with their bandwidth caps, and fake advertised speed rates (which wind up being a quick burst at that rate before settling at a lower rate). Competition is good. I don’t want the government involved.
Which brings me to another point. Why do we all hate the government except when they can step in and help a particular issue or movement? Let’s limit what they can monitor.
Can you name one of repute that has not bundled content with bandwidth (mobile carriers included)? I’m not asking the govt to regulate anything, i’m only expecting anti-trust/anti-monopoly laws to be enforced. Last I checked they were still on the books but no one has the fortitude to invoke them.
Ha of course they have
Oh they so have
Comcast is one of the most horrible companies I have ever dealt with. So glad we ditched them years ago. May the fleas of a thousand camels infest their CEO’s armpits.
Ya think?!