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Public Knowledge, a public interest, pro-consumer group, has filed a petition calling on the Federal Communications Commission to enforce conditions imposed on the Comcast/NBC-Universal merger dealing with Comcast’s usage caps policy.
The group wants the FCC to investigate the legality of Comcast’s decision to exempt its own online video service from the usage caps Comcast is reintroducing on its broadband customers:
In evaluating the merger, both the FCC and the Department of Justice recognized that a combined Comcast/NBC-Universal would have an enhanced motive to discriminate against unaffiliated online video services that might compete with Comcast’s pay-TV cable service. Because Comcast controls their subscribers’ connection to the internet, and subscribers could use that very connection to access video services not controlled by Comcast, Comcast has the ability to manipulate those internet connections in a way that would disadvantage video competitors.
Specifically, Public Knowledge accuses Comcast of violating FCC condition G.1.a.:
“Neither Comcast nor C-NBCU shall engage in unfair methods of competition or unfair or deceptive acts or practices, the purpose or effect of which is to hinder significantly or prevent any MVPD or OVD from providing Video Programming online to subscribers or customers.”
The group argues that unfairly applied usage caps impact Comcast’s online video competitors. Customers will choose the service that does not eat away at their monthly broadband usage allowance, making competitors operate on an unfair playing ground.
The group has raised questions about the industry’s movement towards Internet Overcharging schemes like usage caps and speed throttles and has repeatedly requested the FCC question how data allowance levels are developed, evaluated, and evolve over time.
Other stories of interest:
- Comcast Critics Unimpressed With Company’s Half-Measures on Usage Caps
- Netflix to Broadband Industry: Please Don’t Kill Us With Usage Caps
- Public Knowledge Wants Data Cap Investigation, But FCC Chairman “Open to New Billing Models”
- New Evidence Suggests Comcast Prioritizing Its Own Streamed Content; Usage Cap Must Go
- Cox Slams DSL in New Ads, But Cox Cable Customers Stuck With Usage Caps
If PK actually believed they had a case, they would file a formal complaint against Comcast.
The FCC does not have to act on a petition, they can (and should) ignore it. But they would have to respond to a complaint. The fact that PK did not file a complaint tells me they aren’t sure enough of the facts and the law to stake out a position with conviction.
By filing a petition instead, they avoid the complaint filing fee, which strikes me as more than a bit weasely.
I think the intention here is to get the FCC to address data caps generally. PK has made that a signature issue this year (which is a great improvement over prior years). The FCC tends to respond more quickly when the media/political spotlight shines brightly. I have no doubt PK or Free Press would pay the filing fee and go with a formal complaint if they felt that would be the best way to handle this.
I think the facts are pretty clear here. Comcast is attempting to redefine what constitutes the “Internet” and what is their “private IP-based network.” I think they’d have a stronger defense if Comcast was distributing content over a network on which no general Internet traffic travels. But we’ve seen they are distributing their video content regionally over the same backbone/regional network they send ordinary broadband traffic across, blurring the line considerably.
Comcast’s excuse is even too-cute-by-half when you consider they are still arguing data caps are about last mile congestion. With DOCSIS 3, they have exponentially greater capacity -and- with their ongoing shift towards all-digital (and eventually IPTV), the broadband pipe available to them is simply enormous. DOCSIS 4 will arrive well before their customers fill it. In any case, they seem to have plenty of room for their own video traffic, but plead the need to ration the competition?
Data caps are an anachronism as Comcast explains them. This is really all about monetizing usage, which is frankly nearly 100% pure profit for them. That’s even more clear as they start testing the overlimit fee.
The weasel here is wearing an XFINITY t-shirt.
Like I said, the FCC can choose to ignore a petition, media spotlight or not.
They CAN’T ignore a formal complaint. PK knows that yet filed a petition anyway which tells me their case is weak. With a complaint PK would have to allege a specific violation of a specific statute, rule or Order. Sounds to me like they cannot do that or they aren’t willing to do that.
In other words, they want the FCC to do the heavy lifting for them, which they (FCC) aren’t always willing to do. PK says it has “repeatedly” asked the FCC to investigate caps, but apparently the FCC has chosen not to do so which proves my point. If PK had filed this as a complaint the FCC could not ignore it. PK has no case or they aren’t serious and are simply grandstanding.
We shall see.
Caps are fair. The more data you use the more you pay. It is only fair. If someone doesn’t like it they should start their own broadband company and give service away for free.
Actually, the broadband industry disagreed with you for more than a decade. Their networks were designed with the reality that once constructed, the cost to deliver traffic over them was insignificant, and frankly almost identical whether you sent 1MB or 1TB down them.
Now they simply want to create a new revenue stream: monetizing your broadband usage, to earn more money now that video and phone revenues have stagnated.
Comcast’s wholesale cost to provide broadband is around $9, but they charge you more than $40. Now they want to charge you more even though their traffic costs are largely the same now as then.
So is that fair? Remember, usage caps have nothing to do with charging you for what you use. Otherwise, Comcast would charge you $0.10 a gigabyte (their cost: around one penny) and call it a day. But they are not. They are charging you the same monthly price or more than you have traditionally paid and artificially capping your consumption to suck another $10 out of you for every 50GB. With usage a growth industry, soon more and more will pay another $10. Nothing about this will stop them from raising YOUR broadband bill higher either. Comcast has no plans to stop rate increases.
So I guess it’s fair… if you are a Comcast executive or Wall Street investor looking for more profits. But it has nothing to do with “giving service away for free” or covering their costs.
Tyrone, caps aren’t about consumption bud. They are about curtailing competition. If Netflix and other streaming services compete with similar cable offerings, then how is the cable company going to stop that right in its tracks? Caps. It is anti-competitive plain and simple.
If the cable ISPs were really concerned with congestion, they could simply offer lower speed tiers and throttle usage during peak hours but it is the opposite. They try to up-sell you to higher speed tiers because they make more money that way. They claim that only a small fraction are “data hogs” yet punish everyone else who isn’t with caps.
We all know, that caps are about preventing competition and monetizing ether(bits). I really hope Google is successful in their experiment and that they consider expanding to other markets. This will prove that you can still be profitable as a company and still have no caps and that people want faster speeds.
What a silly comment.
Philip has already addressed the reality of data caps as an extra revenue generator, but I’d like to point out that Google has done exactly what you suggested with Google Fiber. No data caps, and a free service (for at least 7 years) after an initial installation fee (payable in installments, if you prefer). People are already lining up out the door, waiting to sign up.
Of course, it takes a company the size of Google to take on the ISPs, not only in terms of infrastructure, but legislatively and politically as well, in order to hurdle all the roadblocks the ISPs like AT&T and Time Warner like to put in the way of anyone who dares to compete with them.
Data caps not only put the squeeze on customers, but they stifle innovation and internet-based solutions. The MLB offers their online video service (including HD) for $25/month. With the data caps Time Warner would love to introduce, you would end up paying more to TW than to MLB if you watched more than around one game per week. Is that fair? Same with Netflix, Hulu, and other online video and gaming services.
It would be one thing if transmitting the data was expensive, but as Philip points out, the costs of the extra gigabytes are minimal over typical monthly expenses already more than adequately covered by some of the highest customer fees for broadband service in the world.
“With the data caps Time Warner would love to introduce, you would end up paying more to TW than to MLB if you watched more than around one game per week. Is that fair?”
Not a lot of facts in this very generalized statement!
How much bandwidth does watching an MLB game use?
An HD MLB stream consumes about 5GB per 3hr game (@3mbps). That’s 40GB if you watch just two games per week, out of the typical 6-7 games per week that $25/month to MLB.TV gives you access to.
TW wanted to charge overages beyond 40GB/month on their cheapest tier (now $50/month) and charges, so you would be restricted to just 7 games per month, assuming you consume any other bandwidth at all during the month — and even less if you have any other type of video consumption, before TW exacts its toll for overages ($1 per GB, or $5/game)..
Sure, you could have paid for a higher tier–a whopping $150/month for the same unlimited service we’re getting today for $50/month–but how on earth can anyone justify a 3x markup in terms other than them wanting to price gouge the customer? Congestion across their cable network has long since ceased to be a problem, and the cost per GB of the extra data is minimal.
If the ISPs were struggling to make a profit on the data they shut through their networks, then sure, caps could be a justifiable solution, but they’re not. The cost per GB is continuing to drop, and they keep raising their prices ($40/month to $50/month) in the last few years, so slapping caps and overages on top of that is merely the act of a company taking advantage of their (near) monopolistic position in most parts of the nation.
We’ll see what happens in when Google Fiber is up and running in KC. In the UK, there as many as 20 ISPs competing for your custom, and while there are caps for some of the very cheap plans (< $20/month), their unlimited plans start not much higher than that ($30/month). My parents in the UK get unlimited broadband and full unlimited national phone service (incl. free calls to the USA) for less than I'm paying for the lowest TW tier of service, and the competition to lure them to another provide is fierce.