The Department of Justice is investigating the cable industry on suspicions of “anti-competitive” business activities and ill-intentioned data limits. With the proliferation of connected devices and online services, household’s data limits were designed by cable companies to dissuade heavy use from its customers. If a household were to go over its 250GB per month limit that would be charged a standard fee for every gigabyte they went over.
The most recent and most visible opponent of these data limits is Netflix CEO Reed Hastings. As I wrote a few months back, Hastings went to Facebook to attack cable companies, in particular, Comcast’s Xfinity for supposed violations of net neutrality. He wrote, “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 which way is this neutral?”
Taking into account the caps that these cable companies have on customer data, his argument highlights the possibility of unfair advantages given towards cable internet providers. Households in fear of going over their data limits would forgo using apps like Netflix and Hulu and instead stream via their cable provider’s app, in this case, Xfinity. The DOJ and the FCC are currently investigating major cables companies like Comcast, Time Warner, and ATT. The Wall Street Journal reports that, “the Justice Department is examining whether Comcast’s Xbox policy violated legal commitments made by the company in 2011 to secure antitrust approval…Under the terms of that legal settlement, Comcast agreed it would not unreasonably discriminate against other companies transmitting data over its pipes, or treat its own content differently.”
The DOJ is investigating the user authentication requirement for viewing online content. Big cable companies tout their “TV Everywhere” programming, but still require subscriptions to large cable packages before access to online content is permitted. This process is seen as one of the biggest impediments to possibly of networks offering individual channel subscriptions to paying customers instead of packaging it in a large cable bundle.
But cable providers don’t seem to have any worries; their reign over media is far from coming to an end. While this investigation could lead to some minor changes, the idea that anything drastic would come of this is really hopeful thinking. Cable companies are only part of the problem when it comes to high cable bills and lack of programming online. Until programmers like HBO take a stand and offer their programming to willing customers without forcing them to buy into the cable system, there will be nothing to cheer about.