Comcast Roils Net Neutrality Waters

March 28th, 2012 by · 6 Comments

Cable giant Comcast (NASDAQ:CMCSA, news, filings) angered network neutrality supporters this week by saying that usage of its new Xfinity TV service on the Xbox 360 service won’t count against subscribers’ 250Gb bandwidth caps. The fear is that this gives their streaming service an advantage over the Over-The-Top competition, e.g. Netflix. And it obviously does. But none of this should really surprise anyone, the past few quarters of network neutrality peace have been merely a temporary lull in the storm.

Comcast has always had a fast lane that runs on the private half of its last mile pipes. It’s called Cable TV, and it doesn’t count against caps either – even if you leave the TV on 24 hours a day for the full month. By claiming the XBox is like a cable set top, they can simply run the streaming video on the other side of the fence, the protocol they’re using is beside the point.

That protocol is IP though, and that makes it look a whole lot like the bandwidth that does get capped. If they can do this, then they can just put anything they want on the private IP side of things and not count it against the caps and it’s an instant fast lane – no throttling required. That’s what has the net neutrality guys so worked up.  If one device can do private, uncapped IP, so can any other that Comcast wants to sell itself.  This is bandwidth that Comcast *could* use for its public pipes, but is choosing not to do so.  They can choose not to do so more often.

But it’s not clear what opponents can do about it. The loopholes in the FCC’s Open Internet rules have always been huge — it’s only popular opposition that keeps service providers from driving trucks through them.  Make no mistake, Comcast meant to make this move.  They seem to have judged the present environment to be ready for such a move.  We’ll see I guess.

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Categories: Cable · Government Regulations · Internet Traffic

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6 Comments So Far

  • The availability of bandwidth is becoming an issue for cell phone carriers, no surprise it’s carrying over to TV providers too!

  • level3 says:

    FreedomPop’s plan to become the anti-carrierand is turning the entire carrier business model on its head.

    “100% FREE 4G mobile broadband Internet access”

    • Anonymous says:

      As much as I like seeing different mentality in the market, I don’t see a free service having great sustainability.

      At the very least, I wouldn’t expect quality to be consistent when there’s little revenue coming in. I think what’s most important with factoring in quality is where they’re getting their capacity/service from, and that’s Clearwire. We all know Clearwire has had their share of issues (financially, service quality, etc).

      Internet service is not a right if no one is willing to pay for it. If it is, it needs to be financially supported in some fashion. Networks don’t support themselves financially, someone needs to cover the costs to maintain/upgrade these networks. It’s either the customer, investors supporting a failing business model, or the government in the form of tax revenue.

      We need a balance with internet service and the financial side of management. We either have carriers/ISPs gouging their customers by charging high monthly fees and not putting money back into the network, or we get companies like these where they think they can offer free service long-term. Why don’t we see more companies in the middle?

  • Anon says:

    Rob, I think you are right. Not sure if the TR faithful will appreciate your observation that comcast owns a thing called a network and is free to use/price/sell/waste/promote it as they see fit. I for one don’t even understand “network neutrality.” Should we have “grocery store neutrality” too and make them carry certain brands of soup? If you don’t like comcast, call someone else? there is literally no town left in america that doesnt have wired (ILEC) or wireless options. i can see why netflix and other over the top guys would like a free ride, but MSO’s, networks, et al have invested billions in the (boring, expensive, labor intensive) side of packet distribution.

  • Anonymous says:

    shouldn’t comcast and LECs recover the cost of network utilization from its subscribers? After all, aren’t the subscribers requesting the content from the content providers? Why penalize netflix, ESPN, youtube, or any content provider. for the sins, and I use that term paradoxically, of comcast’s subscribers.

    If Comcast introduced usage-based price plans that were unattractive to its subscribers, wouldn’t that stimulate investment and create an opportunity for new entrants? For example, WISPs (wireless ISPs) using WiMAX technology might elect to enter the market if Comcast made its price plans unattractive to a set of its customers.

    Didn’t Comcast and other cable companies first build their networks as monopolists granted exclusive franchise rights in the markets they serve?

  • whylonglvlt says:

    Surely many ISPs are aware of their own customer’s usage patterns. They know that “bandwidth hogs” don’t exist. What, then, are they up to?

    A much better motive for metering and caps in the case of triple-play operators (those who provide Internet and also provide pay television) is to protect their lucrative market for video from encroachment by Internet video competition.

    In other words, Comcast has monopoly power in cable television in many markets. It has set its 250 GB/month cap so that it is impossible to buy television over its Internet service (take that, Netflix!) or to use free Internet video services in lieu of cable TV (take that, YouTube!), thus maintaining its monopoly in video. By the way, that is the definition of a violation of antitrust law. Hello, Justice Department?

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