Justice Department Investigating Claims That Cable Providers Are Stifling Online Video Competition

With more than 25 million users taking advantage of Netflix, millions more adding to the online video craze via Hulu Plus and others choosing Amazon, Vudu and other services for their TV watching purposes cable company’s have become increasingly concerned that customers are “cutting the cord” and gravitating towards cheaper online services. It is for that reason that the Justice Department is currently investigating claims that cable providers are attempting to stifle online video competition.

According to recent accusations company’s including Comcast, Time Warner Cable and others are placing data caps on users who stream a large number of movies and TV shows from Netflix, Hulu and other services. At the same time those accusations claim that cable providers are giving preferential treatment to their own online video services such as the data-cap free Comcast Xfinity service.

Netflix has went on the offensive, claiming that the data-caps do in fact exist and that they are being put in place as customers leave high-priced cable providers for on-demand services.

For their part the Justice Department already has a case, Comcast in early 2012 announced that its own Xfinity app for the Xbox 360 gaming console would not count against a users total bandwidth usage caps. Comcast denied that it was in the wrong during that case, pointing out compliance with the FCC’s Open Internet rules.

In a blog post at the time Comcast Chief Technology Officer Tony Werner wrote:

“It’s really important to us that we make crystal clear that, in contrast to some other providers, we are not prioritizing our transmission of Xfinity TV content to the Xbox (as some have speculated).”

Netflix CEO Reed Hastings in April by posting a simple Facebook message aimed at the cable provider:

“Comcast should apply caps equally, or not at all.”

In the meantime the caps ultimately violate the Net neutrality rules that Comcast agreed in order to of merger with NBCUniversal. Under its Net Neutrality agreement Comcast is not supposed to favor its own technology over competitors in any way, shape or form.