A Justice Department antitrust investigation into whether cable companies are unfairly discriminating against online-video providers is playing to rave reviews from watchdog groups but getting panned by the cable industry.
The investigation is important because it could set the ground rules for how consumers receive TV in the future.
“This Justice Department investigation is great news for consumers and cable’s competitors alike,” said Matt Wood policy director for Free Press, in a statement.
And in another statement, Harold Feld, legal director of the watchdog group Public Knowledge, said: “The future of online competition for cable is being decided right now, and it is crucial that government agencies responsible for protecting the public interest do so."
But Brian Dietz, a spokesman for the National Cable & Telecommunications Association, said that the industry practices reported to be under investigation are pro-consumer.
“The innovative offerings by cable companies are positive developments for consumers and represent accepted and legitimate business practices as well as sound network management,” said Dietz in a statement.
Among the issues that DOJ investigators are looking into is cable-company programming contracts that limit the ability of programmers to offer their shows online, a source with knowledge of the situation told TheWrap.
The investigation is also examining cable’s efforts to cap how much data broadband users can use each month -- and whether Comcast’s move earlier this year to exclude its XfinitiyTV app on Xbox from bandwidth caps that apply to other online video services violated commitments Comcast made to get approval for its acquisition of NBC Universal, according to a report in the Wall Street Journal.
DOJ investigators also want to investigate some cable companies' requirement that subscribers have a cable subscription before being able to access some programming online, according to the Journal report.
Netflix has alleged that Comcast discriminates against the rental and streaming giant, partly due to Comcast’s favoring of its XfinityTV app. Comcast has insisted that its XfinityTV app treatment is legal and appropriate.
Comcast announced in May that it was lifting its cap on customers’ monthly bandwidth use in favor of a model that will enable subscribers to buy as much bandwidth as they want.
At the time, Joris Evers, a Netflix spokesman, said the move was a “small step” in the right direction. “But unfortunately, Comcast continues to treat its own internet-delivered video differently under the cap than other internet-delivered video. We continue to stand by the principle that ISPs should treat all providers of video services equally.”
Spokesmen for Comcast, Netflix, Time Warner Cable and the Department of Justice all declined comment on the antitrust investigation.
“We are glad that DoJ is taking a good look at cable operators’ use of these arbitrary data caps,” said Free Press’ Wood. “We also welcome news that Justice is looking into the one-sided contracts cable companies use to lock up content, and that it is examining apparent violations of conditions attached to the Comcast/NBC Universal merger.”
Said the NCTA’s Dietz: “All the (cable) industry's actions are intended solely to ensure consumers get the highest value for their subscription.”