The US Justice Department is investigating whether cable operators are improperly suppressing competition through data caps (or metered billing). The data caps are being labeled as 'anticompetitive', suggesting that their motives could be to dissuade consumers from cheaper Internet-based viewing options instead of pricier content distributed through cable.
Here in Canada we stopped metered billing from being imposed on indie ISPs and every Canadian (http://bit.ly/wTkiuq), but data caps are still in place and seem to be getting worse. We're continuing to push the CRTC to fix this (more on this soon), but do you think our government should also investigate whether metered billing is anti-competitive? Do you think big telecom are imposing data caps as a way of making online video more expensive so we continue to subscribe to uneccessary TV services?
Article by Jasmin Melvin
WASHINGTON (Reuters) - Two Democratic lawmakers said Congress should examine whether major wireless carriers and cable companies are stifling the growth of online video services like Netflix Inc and Hulu by limiting the amount of content Internet subscribers can download each month.
Online video providers have argued that data caps are keeping more Americans from accessing their programming as they worry bandwidth-heavy shows and movies could interrupt their Internet service.
"When you couple limited broadband competition with a strong desire to protect a legacy video distribution business, you have both the means and motivation to engage in anticompetitive behavior," David Hyman, Netflix's general counsel, told the House Commerce subcommittee on communications and technology on Wednesday.
The Justice Department is investigating whether cable operators are improperly suppressing competition from Internet companies and online video services, according to two people with direct knowledge of the probe.
"While we don't know the extent of this inquiry, it falls on this subcommittee to thoroughly examine the issue and ensure future innovation is not curtailed," said Anna Eshoo, the top Democrat on the panel.
She noted carriers like Verizon Wireless, a joint venture of Verizon Communications Inc and Vodafone Group Plc, and AT&T Inc are eliminating unlimited data plans, and reports that broadband providers like Time Warner Cable are also moving toward tiers of pricing.
Henry Waxman, ranking member of the full House Energy and Commerce Committee, said he was concerned about potentially anticompetitive practices that could be restricting consumer choice. He also called for a careful examination of data caps.
Cable operators are also the leading Internet service providers, prompting worry that they could be trying to discourage their video product subscribers from jumping ship for cheaper, Internet-based viewing options.
Michael Powell, head of the National Cable and Telecommunications Association, argued that data caps and tiered, usage-based pricing were simply about fairness.
He likened usage-based pricing to consumers' summer air conditioning bills, where those who keep the cool air blasting all day will pay more than those that choose to open the window instead. Read more >>
Read more at HuffingtonPost.com
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