Justice Investigating Cable Over Over-the-Top Video

Source confirms data requests on range of issues; Public Knowledge says it, for one, asked DOJ to investigate

A cable industry source familiar with the information
requests confirms that the Justice Department has been contacting cable
operators as part of an investigation into whether cable operators are trying
to suppress over-the-top video competition through data caps, TV Everywhere
"collusion," contract language -- most favored nation clauses -- and more.

According to a cable industry source familiar with the DOJ
requests, the department started out focused on TV Everywhere and alleged
"collusion" and has extended to a range of topics. They said the
investigation has been going on for a couple of months.

The Wall Street
Journal
first reported Wednesday that Justice is conducting an antitrust
investigation into. At least one cable data cap critic confirms it asked
Justice for such an investigation.

A Justice Department spokesman had no comment -- it does not
confirm or deny ongoing investigations. Justice can initiate an investigation
on its own initiative, or in response to complaints from outside parties. In
this case it was likely the latter. He said investigations do not necessarily
mean the issue has met a threshold standard.

"Investigations are just that, investigations."

Netflix and some public activist groups have complained, for
example, about Comcast's not counting the Xfinity video service it offers
through Xbox against its broadband data caps, but doing so for other video
services via Xbox. Comcast defended the practice, but also announced last month
that it was shifting from broadband caps to usage-based pricing.

Public Knowledge has twice asked the FCC to look into the
issue.

Public Knowledge confirmed it had asked Justice to investigate as well, and
expected it was not the only one.

"I can confirm that over the past six months or so we
have been in to let Justice know of our concerns and we have heard that they
are," said Public Knowledge spokesman Art Brodsky. "The cable
industry is doing all it can to try and squash competition. The only people who
don't seem to realize it are the FCC."

The FCC is currently asking for help in determining what
access and carriage rights over-the-top video providers should be entitled to vis-à-vis
traditional MVPDs. That answer could help determining the future of online
video delivery for both cable competitors and the cable operators moving their
content online. That is, unless DOJ gets their first via its
investigation.

The Journal
reported that Justice had talked to Comcast and Time Warner Cable. Neither were
commenting at press time.

"Consumers are the beneficiaries of tremendous choice, competition and innovation in the video marketplace with dozens of alternatives now available for viewing content on multiple devices through a variety of service options," said National Cable & Telecommunications Association spokesman Brian Dietz. "The innovative offerings by cable companies are positive developments for consumers and represent accepted and legitimate business practices as well as sound network management. All the industry's actions are intended solely to ensure consumers get the highest value for their subscription."

Free Press, another data cap critic, was pleased to hear
Justice was looking into the practice. ""This Justice Department
investigation is great news for consumers and cable's competitors alike," said
Free Press Policy Director Matt Wood in a statement. "Cable operators
can't justify data caps, no matter what shifting excuses they offer."

A Free Press spokeswoman confirmed the group had talked to
Justice about the issue as well, but had not called for an investigation.