Feds Looking into Cable Company Anti-Trust Actions Toward Online …
June 15, 2012 in Blogs
Hell yeah! If you’ve been a long-time reader, you know I’m no fan of the cable companies. Their outdated, dinosaur-like companies are holding back video entertainment in a variety of ways if you ask me. Every once in awhile one will make some move that seems like they’re on board with the future but then they all do something colossally, well, dumb, and I think they’re totally out of touch. I cut my cord and have never looked back. I pay far less, have no unwanted channel bloat, and have had the pleasure of discovering shows like Leap Year and Battleground. But now, it seems the US government has decided that what the cable companies have been doing might be downright illegal. Go get ‘em!
According to the Wall Street Journal, the US Justice Department has been looking into whether or not cable companies are acting illegally in their moves against online video. The investigation is said to be wide-ranging and include Comcast and Time Warner Cable among others. Online providers spoken with during the investigation include Netflix and Hulu.
The Justice Department is looking into whether or not the cable providers have been doing things like setting data caps and trying to single out online video for separate fees, something which I have spoken out against in the past, in order to keep online video from biting into the cable companies’ business. It’s all streaming zeros and ones so I don’t see any reason why one type of data should be charged differently than another.
Apparently, the Justice Department has been reading my articles. OK, maybe not, but they’ve definitely been seeing a disturbing trend in how cable companies have been looking at online video. For example, Comcast famously stated that video content watched through theirs Xbox 360 app, would not count against the data limits of its subscribers the same way that other forms of video content do. Effectively, giving preferential treatment to its subscribers and content. Well they’ve sort of been in trouble in the past with the FCC so it doesn’t seem far-fetched.
The crux of the matter, I think, is that the cable companies don’t want people to cut the cord. They don’t want to lose all that revenue and they don’t want to have people using the bandwidth they’re supplying for online video. I also think that they can’t, or are unwilling to, unbundle all those channels to give consumers a more a la carte option or a pay-as-you-go choice. On top of that, much of the ‘core content’ that television broadcasters are putting out is also becoming available online through either their own apps and sites or through services like Hulu and Amazon. Of course, the cable companies are going to feel threatened, because they’re too big and slow to change and if they don’t, they’re going to end up on the short end of the coax, so to speak.
The thing that amazes me, is that the US Justice Department has been doing anything. Frankly, I don’t have all that much faith in them doing what needs doing when it’s just to protect the rights of new media startups and consumers in general even though that falls into their responsibilities.
Other topics the Feds are said to be looking at is that crap idea that consumers need a pay TV subscription to access online video, as in the Hulu authentication story. It seems that the DoJ believe it’s bad business as well. It’s another way to stifle the consumer’s ability to cut the cable and get the content online without paying high fees for bloated channel packages. So pretty much, it’s anti-competition.
The Justice Department is also looking at contracts that have been signed which allow programmers to get their content on cable systems. Some things that look fishy there are clauses that require them to give the best prices to the biggest cable companies. That is something that is also being investigated in the eBook suit where Apple and publishers were charged with price fixing and in which some publishers settled back in April (Apple is still embroiled in it as a key player).
It looks like consumer and would-be-cord-cutters have some allies up in the Capitol Hill area. Al Franken stated that cable bills are ‘out of control’ and consumers would prefer to watch TV/movies digitally. Attorney General Eric Holder replied with “I would be one of those consumers.”
Big name, powerful allies who really have the best interests of consumers in mind is exactly what we need to unbundle, unlock and unfetter access to the content that broadcasters and studios are creating. Unfairly charging for video versus other forms of data and various other tactics have clearly been aimed at keeping cable company control of video entertainment to continue padding their bottom lines. Hopefully, something will come of all this and the playing field will be leveled giving online video the true freedom of access when we want it, where we want it and without the need for a pay TV subscription.
The upshot is, if the DoJ does slap the cable companies, it could open the way for a ton of new online video services and finally break it free of cable company control. On the flip side, it could also mean the whole cable industry goes to metered data plans so they can get more from power users and those who stream a lot of video to make up for their falling profit margins on the cable TV side of the equation. Hopefully, that won’t be the case because I think that would also be a move aimed at keeping people subscribed to the old cable model.