The Wall Street Journal reports the Justice Department has opened a wide-ranging antitrust investigation into the cable companies and whether they've acted improperly to quash competition from online video providers. DOJ officials have reportedly spoken to Netflix, Hulu, Comcast and Time Warner Cable, among others, about issues such as data caps. Most cable companies are also the high-speed Internet access providers for their customers, creating a rising conflict between the pay-TV and broadband portions of their business. Meanwhile, consumers are increasingly using high-speed broadband access to watch TV shows via online video services, prompting talk of "cord-cutting" among such subscribers.
Comcast specifically drew the ire of Netflix when it recently said videos viewed on its Xfinity Xbox app wouldn't be counted against subscribers' monthly data caps the same way as videos viewed on other apps. The Journal reports the Justice Department is investigating whether that policy would violate cable giant's commitment not to discriminate against other companies that use its pipes to transmit data, or privilege its own content, as part of the conditions attached Comcast's purchase of NBC Universal. Comcast contends Xfinity isn't subject to the terms of the settlement because the data it uses is transferred over the company's private network, not the public Internet. The company also recently altered its payment structure for customers that use more data.
The Obama administration has taken an aggressive stance on antitrust issues in recent years, particularly with regard to tech issues. DOJ recently brought a lawsuit against Apple and a group of publishers, alleging they conspired to fix the prices of e-books. A Justice Department lawsuit to block AT&T's proposed takeover of T-Mobile USA last year led to the breakup of that deal, and the Federal Trade Commission is currently engaged in a probe of Google's core search business. There are also reports of other investigations, such as a review of Universal's acquisition of the record label EMI and an investigation into Zuffa's Ultimate Fighting Championship, the largest player in the sport of mixed martial arts.
Given the FCC's recent preference for light-touch regulation and industry cooperation, the bottom line seems clear: antitrust litigation, not regulation, is this administration's preferred method for tackling telecom and media policy.