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DoJ Investigating Cable Companies over Data Caps

The Wall Street Journal reports that the Department of Justice is conducting a "wide-ranging" antitrust investigation into whether cable companies like Comcast and Time Warner Cable are purposely setting data caps to prevent customers from using rival online video services.

According to unnamed sources, the Department of Justice has already spoken with Netflix and Hulu. Netflix has been the most outspoken of the two, complaining that cable companies are setting data caps on purpose to prevent competition from steering traffic away from their own streaming video services. Just last month Netflix said Comcast discriminates against the streaming giant, referring to Comcast's exemption of its XfinityTV app on Xbox from the bandwidth cap.

Unnamed sources also stated that Comcast, Time Warner Cable and other providers have been questioned by investigators over issues regarding data caps, or rather limits to the amount of data a subscriber can download each month. The pay-TV companies claim that the limits are needed to stop heavy users from overwhelming their networks, yet it doesn't seem to be coincidence that they're also now offering rival streaming services.

The Justice Department probe reportedly highlights how the shifts in decades-old patterns of television viewing are "shaking the tightly regulated industry." Prior to Netflix, pay-TV companies had invested billions of dollars building their networks and cramming television channels into bulk packages. They're reluctant to become conduits for other companies' data, and reluctant in allowing customers to "cherry pick" their favorite channels.

However the decisions made in Washington over the investigation could determine how quickly new video services will spread, and what form they will actually take, the Wall Street Journal reports. Currently the Department of Justice is specifically looking into whether Comcast's Xbox policy -- which claims data used by streaming video through the Xfinity app doesn't count towards the customer's monthly usage -- violated legal commitments made by the company in 2011 to secure antitrust approval for its takeover of NBCUniversal.

"We have consistently treated all video carried over the public Internet the same whether it comes from our sites or anywhere else on the public Internet," the company said in May.

The Department of Justice is also looking into whether cable companies are acting anti-competitively by making viewers have a cable subscription before being able to access certain online programming. It's also investigating the contracts that programmers sign in order to be distributed on cable systems, some of which include "most-favored nation" clauses. These make programmers give the biggest cable companies the best price they are offering anywhere, among other conditions.

The Wall Street Journal's full report can be read here.

  • rsktek
    Can't believe we're going to have to back Netflix up, but looks like supporting them is the only way to get rid of these stupid, mental caps :/ so, I guess, go Netflix...
  • house70
    As much as I dislike govt. mixing in private businesses, a major shake-up of these com thugs is in dire need. They've split the market so each of them has a virtual local monopoly and we need to change this model.
  • the_crippler
    Lots of growing pains in an industry that has managed to remain in a walled fort for far too long. It's adapt or die time for them, and unfortunately, it's the consumer who suffers while they get their act together to move forward.
  • t2couger
    Cable companies need to grow up. I canceled my TV portion of my service because i am sick of paying the ever hiking prices on limited content and rampant advertisements. internet only is the way to go no advertisements and unlimited content is the way to go. If i could go around the local cable company i would unfortunately they have a monopoly in my local area.
  • kingbrodij
    f you time warner, 100% f UUUUUUUUU! Got me by the short hairs, no other choice in my NON RURAL area. (and I dont want a dish)
  • cscott_it
    Unfortunately, things like this is what Net Neutrality were trying to prevent. I think it's just a matter of time before they try to "prioritize traffic".

    I have the same issue with my ISP - that if I use their package (SuddenLink), I can stream their service for without effecting my limit. Of course, to get that, I'd also have to buy their cable package.

    Bandwidth caps are a terrible idea in general - it does nothing but promote stagnation within the industry.

    I'm sure this idea came about like this:
    "How can we make more money without improving our infrastructure or delivering a better experience?"
    " How can we prevent spending costs on upgrading our infrastructure?... I know, we'll cap everyone and turn a profit by offering our services that don't count against their data package..."
  • Cry babies. Wahhhhh, I don't like Cable but can't stand Dish. I want my wahhhhh.

    Grow up people. It is the consumer who decided they can't live without some form of video or games flashing before their eyes. Stop complaining, cancel your services and go for a walk, meet some friends for a real cup of coffee at a real cafe, spend some time with your family if you have any other than some other fool on Facebook.

    Don't sit there in front of your keyboard, waiting for a download stream of a video to fill your nearly useless brain.

    TURN IT OFF, STOP GIVING THEM MONEY! What did you do before? Oh, I forgot, you were born with an iPhone attached to your ears, a tablet in your lap and a video game instead of parents.
  • TheKurrgan
    The entire television industry is in a panic now very similar to the record industry, and are struggling to find a way to stay profitable. Lets face it, the television networks were the content delivery system before, but now we all have the ability to get direct access to the content they are showing, and without *&*#ing advertising. Thats a big problem for them, and the cable companies are hardest hit because they make a living on serving content over a cable line, which is their primary business. They also offer internet service as a course of natural evolution as it is required for them to stay competitive with the "triple play" the telephone companies offer now as well.
    Problem is, more and more people dont want the cable television service.
    Comcast makes it difficult to get their non tv services without buying a "decent" TV Package.
    I have the Blast Extra 25Mbit/6Mbit internet connection. It comes with a 250GB cap.
    I come within about 75GB of it each month, never having gone over and never restricting my usage (A word on that, I do all of my heavy downloading at work on the fiber connection. I frequently sync lots of files and download about 900MByte a day during the course of that, but even still that wouldnt bust my cap but WOULD put me close)
    At the end of the day, all of this crap is inevitable. We're all witnessing what could be call the end of a 40 year old multi billion dollar industry, and they arent giving up with out a fight. Frankly, I expect it to get much worse before it gets better, as it seems to be a growing trend for content providers to want to forcibly line their pockets with money via either litigation, or twisting the industry so you have no other choice.
  • nebun
    this is good stuff....about time
  • john_4
    The traitor Eric Holder and his boss Obama both need to put being bars for Fast & Furious.