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DOJ Investigating Anti-Competitive Impact of Usage Caps
And How Cable Operators Manage Internet Video Competitors
by Karl Bode 09:42AM Wednesday Jun 13 2012 Tipped by AndyDufresne See Profile
Anonymous sources tell the Wall Street Journal that the Department of Justice is investigating whether cable companies (and telcoTV companies) have been engaging in anti-competitive behavior when it comes to the Internet video content traveling over their networks. The investigation appears to be motivated by a recent debate over whether Comcast should be allowed to exempt their own content on the Xbox 360 from their usage caps. Investigators have spoken to both Netflix and Hulu, and have also spoken to Comcast and Time Warner Cable about caps and overage fees:
In its cable TV probe, Justice Department investigators are taking a particularly close look at the data caps that pay-TV providers like Comcast and AT&T Inc. T +1.11% have used to deal with surging video traffic on the Internet. The companies say the limits are needed to stop heavy users from overwhelming their networks. Internet video providers like Netflix have expressed concern that the limits are aimed at stopping consumers from dropping cable television and switching to online video providers. They also worry that cable companies will give priority to their own online video offerings on their networks to stop subscribers from leaving.
As we've long noted, caps and overages on landline networks are largely aimed at protecting traditional television revenues from Internet video, with congestion usually used solely as a bogeyman -- since these days it's rarely an issue on well-managed networks. Incumbent ISPs always make these claims of congestion, but never provide hard, raw data -- because it doesn't exist. It should be interesting to see what kind of answers the DOJ gets, and whether they're made public.

FCC boss Julius Genachowski recently gave the cap and overage model significant praise, being rather oblivious to the pricing system's anti-competitive impact -- despite recent warnings from Netflix about how the caps are being abused.

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Saybrook, IL

2 recommendations

reply to Chubbysumo

Re: .

I think you should get a T-1 or more for $400 a month and not have caps. If your going to be doing business, don't complain about NOT paying a business price. I can't even believe you are complaining while getting a 100Meg connection. That costs me $5,000 a month for a guaranteed connectionn at that speed!!!! I love the quotes about 1-3 cents also. You have no idea the costs to deliver the kind of speeds your are getting. NONE.

Mr Matt

Eustis, FL
·Embarq Now Centu..

2 recommendations

Just back from the 1860's!

I just returned from the 1860's in my time machine and was surprised that the Federal Government has taken action against the Railroad Robber Barrons. Apparently those scum bags were discriminating against businesses they did not like when the business owners asked them to haul their freight. They charged unaffordable rates to those business men that they did not like and cheap rates to business men they did like. In fact one Railroad prick refused to haul newsprint to a newspaper that wrote negative stories about their Railroad. Apparently Americans got enough of this B.S. and demanded relief. As a result the Interstate Commerce Commission was formed to regulate the rules and pricing for hauling of freight. So regulating monopoly pigs that set rates to discriminate against businesses or competitors that must use their services is not unprecedented.


Superior, WI

2 recommendations

reply to JasonOD

Re: .

said by JasonOD :

Bottom line, companies need to be able to control their business. If they overstep, the market will punish them.

The shills have come. If there is no other competition, the incumbents can get away with whatever they want, because they know the customers have no where to go to.



2 recommendations

reply to NeoandGeo
Caps and overages were never about congestion, they were always about cash and keeping the gravy train rolling.

If the network was so abused, then why now can you buy more data? Under Comcast logic, it's OK to degrade the network as long as someone else pays for it?

"Because we can" fees just don't happen in competitive industries. If you want a meter, be a regulated utility. But a lot more might happen that you don't like, cablecos.

To be fair to Comcast, they at least let you see a meter. You could always have some mystical "Abuse Team" call you with whatever numbers they want to pick out of the sky.