DOJ Reportedly Investigating Cable Companies For Squashing Online Competition

The Justice Department is reportedly engaged in an anti-trust investigation into many areas where the cable TV industry might be acting inappropriately to try and quell competition from online video. Many consumers want to pick and choose what they watch, using services like Hulu and Netflix, whereas cable companies would like them to continue to pay for bundles of TV channels, even some they might not watch.

According to sources cited by the Wall Street Journal, the Justice Department has already spoken to online video peddlers and has questioned Comcast, Time Warner Cable and other cable companies.

They’re trying to figure out if cable providers have been setting data caps to limit the amount of data a subscriber can download each month in an attempt to keep consumers from viewing content that is outside of the cable companies’ offerings.

Since many cable companies provide the high-speed Internet access needed for many consumers to stream video, some pay-TV companies are not too happy about their TV channels being bypassed for online video because of all the cash they’ve already invested in their current networks.

The TV industry has been tightly regulated for decades, and decisions that are made now could have a huge impact on how video services spread in the future. The probes are examining data caps that Comcast and AT&T use to deal with the uptick in video traffic on the Internet. Cable companies say those limits are necessary to keep the heaviest users from overwhelming the networks.

But online video providers like Netflix are worried that the limits are there to keep consumers from dropping cable TV and making the move to online. Comcast sent some eyebrows skyward when it announced that any videos viewed on its Xfinity app on the Xbox wouldn’t be counted against subscribers’ data caps. Some accused the company of trying to get around federal rules that say Internet providers can’t favor their own content over others.

Comcast said it was different, because that content goes over its own private network and not the public Internet.

Something else investigators are looking into is whether cable companies are stifling competition by forcing viewers to have a cable subscription before being able to watch online programming from entities like ESPN. Paywalls like that could potentially be in place to keep people from ditching cable and just buying access to individual channels online.

U.S. Probes Cable for Limits on Net Video [Wall Street Journal]

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  1. Coffee says:

    I don’t know how much investigating has to be done here…yes, it’s fairly obvious that data capping has a direct effect on cable companies’ ability to put a stranglehold on streaming services.

    And regarding this: Something else investigators are looking into is whether cable companies are stifling competition by forcing viewers to have a cable subscription before being able to watch online programming from entities like ESPN.

    I know this to be true because where I live, I cannot watch streaming sporting events on ESPN. My internet provider is not on “the list”, so it’s either have cable with a sports package or severely limit my ability to watch live sporting events.

    • sp4rxx says:

      Wouldn’t spoofing your IP or location trick the system in to thinking you were elsewhere so you can stream/watch that stuff?

      It especially works for blackout crap that is enforced when wanting to watch your home team play … at away games!

    • Pixilox the Lock says:

      I can watch streaming sports but I have to have ESPN included in my cable package (and log in with my account) in order to do so. I have to watch on the computer though, as my provider isn’t on the list for Xbox streaming.

    • rugman11 says:

      That’s an argument between you and your internet provider, who has decided not to pay ESPN for the Watch ESPN content. I doubt the DOJ has an argument here because there’s no direct tie to cable TV. I’ve gotten ESPN3 through my cable TV with Cox, I’ve gotten without cable through AT&T, and I’ve gotten without cable through CableOne. The thing stopping most cable internet/non-Cable TV customers from getting ESPN3 is that their internet company has decided not to purchase access for its non-TV customers.

      • Coffee says:

        Damn it…you’re right about that one…I misread the article and somehow came away with the impression that it was referring to withholding ESPN access to internet providers so people would have to get a cable subscription. My bad.

    • TheUncleBob says:

      “I don’t know how much investigating has to be done here…yes, it’s fairly obvious that data capping has a direct effect on cable companies’ ability to put a stranglehold on streaming services.”

      I don’t think that’s the issue here. Obviously, it has that effect – but is that the reason? What would need to be investigated is the claim that the data caps are in place because the ‘tubes can’t handle all the pressure of a world without data caps. Which, sadly, is probably true because of the crappy job that’s been done bringing High Speed internet to most of the US.

  2. Blueskylaw says:

    SInce when is this kind of thing surprising? The only function of a large corporation is to squeeze as much money from you as possible through any means possible. Between banks, phone companies, and cable companies, i’m betting that the next thing we see is them being accused of genocide in the pursuit of profits (all in the name of increasing shareholder value of course).

    • Coffee says:

      If the Facebook debacle told us anything, it’s that not even shareholders are safe anymore. The only people that companies are really concerned are the top 1%…of shareholders. Retirement funds and whatnot can suck it and will always be the last to know which way the wind really blows.

      • Blueskylaw says:

        This is why Facebook and others are being sued. Facebook told top investors a few days before the IPO about downgraded forecasts for their company and yet they somehow “forgot” to mention it to everyone else; this allowed the top dogs to unload their piece of sh*t stock on the first day in the first hour before it hit the death spiral.

        • Coffee says:

          Yeah…that’s why I wrote that, Buckwheat. I already knew that. I’m smart. You didn’t help at all, and you still owe me $1,000 for that Iron Lung business. Can’t believe I fell for it. Also, MAKE A G+ ACCOUNT, DAMMIT.

  3. Awesome McAwesomeness says:

    Big business trying to manipulate the market? Say it isn’t so! Cable companies suck all around. I am glad to have an internet provider that doesn’t offer cable or other services. We rarely have issues and can watch Netflix and Hulu all day and night.

  4. rugman11 says:

    I doubt the DOJ will make any headway on the cable subscription-required online content, but they might have an argument with the caps, given that Comcast is allowing its own content to pass through uncapped. That seems to be a clear restraint of trade.

    • who? says:

      The best thing that could come out of this is if the cable providers were forced to sell blocks of bandwidth to independent ISP’s, like the big telcos have to do with phone service. That would allow other ISP’s to come in and resell the service, and we’d actually have competition in the marketplace.

  5. catastrophegirl chooses not to fly says:

    i wonder if directv, comcast, et al will be threatened enough by this, or forced by a judgement down the road, to quit locking paying subscribers out of HBOGO on certain devices. [roku]
    my sister has directv, has HBO, pays for all that – and has a roku and cannot watch HBOGO on her roku because directv has decided that anything that might draw eyeballs away from the satellite programming is a threat.
    fortunately neither she nor i has to deal with bandwidth caps or throttling yet, but i worry that it will come.
    i understand paying more per use of bandwidth actually, and yes, even as someone who streams 100% of my tv, so a high bandwidth user myself, i’m willing to pay more than the grandma down the street who only checks her email once a week and downloads the occasional photo. but i want that price difference to be reasonable, not punitive. and i want it to be the same price regardless of where the content is coming from

  6. toddb says:

    First, what the heck took them so long to investigate this?! Moving on… why is there nothing about how the content owners are also the content delivery system? Where is this a benefit to consumers or anyone but the corporations themselves? And as much as they claim there are options for delivery services, there really aren’t. At best you have a single cable provider or a single “traditional phone carrier.” Yes, there is always the option of satellite for TV only, but thats assuming you live in a place where that would work (clear sky, no trees, no HOA/renter regulation).

    It would be great if this would convert to a regulated utility for “access” – you can pay any cable provider for service over the network, any Internet provider for access to Internet, and its delivered by a 3rd party who owns the lines and charges a flat rate for line access + separate rate for usage irrespective of TV or Internet. Kind of like electricity – we pay 1 company for the lines, and a separate usage fee for generation up the line from anywhere else.

    • incident_man says:

      And anymore, with satellite companies, one’s restricted, effectively to TWO choices: Horse sh*t and dog sh*t. The virtual death of C-Band (big dish) satellite effectively killed any kind of satellite tv competition. When C-Band was booming, one could buy the same programming from literally dozens of different companies. Some of those also offered a-la-carte programming as well. Prices were low and quality was excellent; you just had to be able to move the dish to different satellites to get everything…..a minor inconvenience.

      It used to be that I could pay $30/month for what I wanted, including premiums and network channels (from outside my time zone) through C-Band. Now the same thing through DirectTV and Dish Network is easily twice that price, plus it comes with a whole host of other stuff I don’t give a hoot about but would be paying for anyway. On top of that, if I want network programming, I’d be forced to buy LOCAL channels. My ability to choose WHEN I want to watch a show was eliminated, thanks to the cable companies and the National Association of Broadcasters (NAB).

      Back when I was watching C-Band, I could watch something like the X-Files at 6 PM (since I live on the west coast), instead of having to wait until 9 PM, and then a competing show at 9 PM. That way I could watch TWO different network shows that typically aired on two different networks, presumably in the same time slot (I had both east and west coast network feeds—legally). But, nooooooo, cable and NAB took that away from me.

      I don’t feel that I should have to pay extra for a frickin’ DVR to watch a show when I want to watch it, either. As a result of the price difference and the restrictions, pay-tv and I parted ways. These days, it’s OTA, Netflix and Redbox. I still get to watch what I want without all the junk.

  7. myktag says:

    what about the price fixing, Cable and internet combo 69.99 and Internet 62.99. Comcast we see what you did here.

    • ARP says:

      Not price fixing. Not really tying either since they not forcing to buy/use the lesser product, and don’t have enough market share.

  8. chucklesjh says:

    Why are they just targeting cable companies? Could they talk to CenturyLink too with their ridiculous 250GB cap when they offer 40Mbps/5Mbps service?

  9. sp4rxx says:

    It seems that the more there are devices and/or software to stream digital content for either free or relatively cheap, the more the cable companies get their panties in a twist….

    I hope the DOJ does find something wrong with their practices – I mean, who DOESN’T want the freedom to choose what they want and don’t want to watch. Why spend $50/month on media access to crap you don’t watch, when you can spend half that or less on all the media you want through said devices and software?

    Don’t the ‘big business’ companies realize that this actually promotes the piracy of downloading all the stuff you want freely elsewhere to watch later? It seems the more they try to block, the less money they make since people are “cutting the cable” and either downloading it for free or choosing simply to not watch TV?

  10. IphtashuFitz says:

    The Comcast “our network vs. the public internet” argument is largely a moot one, or it could be made moot with minimal investment by Comcast. Netflix, like most big internet presences, uses a content delivery network to distribute their media globally to servers physically located all over the world. Then when a user wants to access a movie, etc. they’re connected to the closest copy of the media. Commercial CDN’s like Akamai, Limelight, etc. have been doing this sort of thing for decades now, even going so far as to providing servers to large providers like AOL to store content in their own datacenters. All Comcast would need to do is let Netflix put a few of their CDN servers in one or two Comcast datacenters. I’m sure Netflix would be happy to pay for that privilege even.

    But since that would cut into Comcast’s monopolistic practices I don’t see it happening unless the feds force them to do it…

  11. ARP says:

    If there were only a recent transaction that showed that cable providers are trying to control content by purchasing them, and reducing competition…. nope nothing comes to mind. Luckily, judges decided that corporations get all the benefits of being a person and none of the negatives.

    /s

  12. Vermont2US says:

    Come November, we need to elect more Republicans…government regulation is the problem! We need a free market so prices come down and we are better served by big business!

    /s

    (Please ignore the fact that there is basically no competition in the tv and internet access marketplace.)

  13. Tacojelly says:

    It took them long enough

  14. Lyn Torden says:

    The world is ultimately going to an all digital, use any service from this infrastructure, type of communication. The cable companies that are still trying to push their TV services are just impeding technological progress.

  15. ferd says:

    Obviouse (at least to me) that providing the wire and programing is a conflict of interest if not monopolistic.

  16. Duffin (Ain't This Kitty Cute?) says:

    It’s about freaking time DOJ! Man, why does the government always run so much slower than the rest of the country? This has been an issue for years now and they just now noticed? Well, here’s hoping they talk to as many people as possible and tell the cable companies that data caps aren’t allowed, especially since they’re reasoning is bogus to begin with.

  17. zantafio says:

    Will it be the end of all the Jeeeeesus channels?

  18. LanMan04 says:

    Comcast said it was different, because that content goes over its own private network and not the public Internet
    —————–
    Sweet, so I can exchange as much data as I want with other Comcast customers and it won’t count against my cap (inside their network, no peering)…..RIGHT, COMCAST?? RIGHT?

    *crickets*

  19. SilverBlade2k says:

    Why investigate…I see only 2 possible solutions to stop this:

    1) pass a law saying that data caps are illegal. Boom, the cable companies can’t do anything with that and have to take it.

    2) make it illegal to bundle packages, and make it an enforced legal option for customers to pick and choose the channels they want. Certain channels will die, and those are the exact ones that need to die.

    • rugman11 says:

      Wow, so we should screw over the people who actually like bundled packages and force a complete overhaul of an entire industry just so that you don’t have to buy cable? Screw that. Not to mention the complete violation of the Constitution that would entail.

      • lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

        I have no problem with bundled packages, but I really wish (since I can’t get OTA where I live) there was a way to just pay for the few channels I’d actually watch.

        Strangely, our Comcast franchise here in PA offers a Cricket channel that you can buy separately, but I can’t just get the network channels plus TNT, for instance.

        • rugman11 says:

          But that’s kind of the point. Bundling only works when everybody is bundled. For some people, sure, it’s not a good deal. But for most people, who watch multiple channels, it ends up being a good deal.

    • FLConsumer says:

      Those bundles often are there because of the content providers (channels/networks) rather than Comcrap et al. Want ESPN? you’ll be forced to take ESPN1, ESPN2, ESPNU and put them on your basic cable tier. There’s a whole bunch of these out there. Discovery/TLC/Animal Planet, HGTV/Travel/Food Network are another. There’s plenty of crap ones as well.

      As for the home shopping channels — the cable cos get kickback of sales from their market, so you’re going to see as many of these as there are available.

  20. frodolives35 says:

    The harder they try to tighten the hold the more people leave. Its like trying to grab a handful of water. Embrace change.