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Comcast has reportedly turned its back on promises not to data discriminate

Internet video has a problem.  Many of America's top cable providers -- such as Time Warner Cable, Inc. (TWC) and Comcast Corp. (CMCSA) -- also happen to be cable television providers.  The last thing they want is people ditching cable TV for cable internet video, which hits them with a double whammy of extra bandwidth demands and less subscriber revenue.

I. Are Cable Companies Violating Their Promises?

According to a report in The Wall Street Journal, the U.S. Department of Justice (DOJ) has initiated a probe into concerns that Comcast and others are working to quash internet video.  It's talked to Hulu and Netflix, Inc. (NFLX), leading net-video providers as well.

The DOJ probe could have major impact if the department decides that antitrust violations have occurred.  The government agency has made waves in recent months sinking AT&T, Inc.'s (T) acquisition bid of Deutsche Telekom's (ETR:DTE) T-Mobile USA and by suing Apple, Inc. (AAPL) and top e-book publishers for price fixing.

Among the decisions that triggered the new probe was Comcast's decision to offer free data to customers who use its Xfinity app on Microsoft Corp.'s (MSFT) Xbox 360 console.  Both Netflix and Hulu's apps count towards users' capped data limits, but the ISP's own app does not.

Comcast Xfinity
Comcast has been accused of data discrimination by rivals. [Image Source: Zachary Kaufman]

The issue is complicated by the fact that some major internet video providers are actually owned by the same companies looking to damage them.  For example, while Comcast's decision may damage Hulu, Comcast is also a major owner of Hulu, along with News Corp. (NWS).

Comcast is treading on thin ice as it promised in 2011 to treat competitors' data the same as its own, as part of its purchase settlement with the DOJ regarding its purchase of NBCUniversal.  Now it appears to be forgetting its promises.

II. Channel Providers Pressured Into Bundling

The DOJ is also examining the "fairness" of contracts that cable providers push channel providers into.  One practice under investigation is cable providers' efforts to block channel providers from individualling selling a channel, instead forcing them to opt into authentication schemes.

In other words, ESPN might want to offer to sell you its channel for $2.50 a month with open access, but cable companies have currently nixed that option.  The cable companies instead force you to buy their TV packages, which run $30 USD per month or more, in order to gain access.  Only customers who authenticate themselves as cable subscribers can then access ESPN on mobile devices.

ESPN app
Cable providers have fought to only allow mobile channel access to authenticated bundled cable subscribers. [Image Source: Howard Forums]

At a Tuesday Senate hearing, Attorney General Eric Holder let it be known where his sympathies lie.  When Sen. Al Franken (D., Minn.) suggested that some customers wanted to ditch cable and watch internet video instead, the Attorney General remarked, "I would be one of those consumers"

Source: WSJ

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By mcnabney on 6/13/2012 5:37:08 PM , Rating: 2
The government might actually stick up for the little guy. While the previous administration worked really hard on fining Janet Jackson and Howard Stern, the current occupants are forcing net neutrality and breaking up price-fixing schemes.

By Master Kenobi on 6/13/2012 7:05:38 PM , Rating: 2
Well the DoJ has little to do with who is in the white house, more like it's an election year so congress will be less likely to get in the way of what they are doing. This is normal.

By NellyFromMA on 6/14/2012 9:16:25 AM , Rating: 2
Sadly, the current state of affair over the past 8-12 years of congress is ANYTHING but normal, and its terrible when someone accepts it as such...

By Samus on 6/14/2012 12:56:04 AM , Rating: 2
I don't know why you got rated down. I completely agree with every point you made.

I had comcast for years and just recently moved into a building contracted to RCN cable, which sucks and costs more than Comcast, and when I called Comcast a few weeks after moving to cancel, they promptly canceled and back-dated my refund. I couldn't believe it, I almost felt bad leaving them just because they didn't put up a fight to cancel. I also went over my 250GB cap numerous times (way over 300GB one month because my torrent community had locked-ratios during XMAS) and I received no penalty, email, or phone call.

By Dr of crap on 6/14/2012 8:17:14 AM , Rating: 2
Really ?
I have Century Link DSL.
$25/month for 12mb on fiberoptic - NEVER charged extra for using to MUCH data!

By jRaskell on 6/14/2012 8:29:05 AM , Rating: 4
Comcast playing fair? Really?

Do you have any idea whatsoever what this DOJ investigation is all about?

You can watch all the Xfinity videos you want, hundreds of gigabytes worth if you so choose, with ZERO impact on your bandwidth usage, while other services all consume bandwidth.

I really cannot fathom how any reasonable person could consider that fair. I just can't.

Also, one of my co-workers lives in an area that has Verizon Fios available. Every 6 months, he calls Comcast, complains about the cost of his bill and says he's going to switch to Fios, and his bill gets cut almost in half. He's been doing that for 2 years now.

I don't have Fios available where I live. I've tried calling Comcast and complaining several times, to no avail. I pay over $60 more a month than my co-worker for similar service.

Any claim that Comcast is playing fair is completely and utterly absurd, or simply made in complete ignorance.

By theapparition on 6/14/2012 9:52:06 AM , Rating: 3
So you're happy that they haven't abused their monopoly status? You think they should be left alone because they didn't charge ridiculous over cap fees?

Talk about lowered expectations.

"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer

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