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]