Netflix, who once thought bandwidth caps were
no big deal, not too long ago finally realized that they can indeed be used anti-competitively to put services that compete with an ISPs content at a competitive disadvantage. Since that time they've been heavily criticizing "cap and overage" ISP pricing models, arguing that they're in no way based on economic or network congestion realities, but are instead primarily used to
drive already-expensive broadband prices up, and to drive Internet video competitors out of business.
Though the chance of any real net neutrality consumer protections are
essentially dead in the United States for now, the subject has seen renewed interest after it was revealed
Comcast Xfinity content on the Xbox 360 doesn't count against their usage cap. Netflix likewise has turned up the heat, recently offering a
presentation at the FCC highlighting how such caps are being used anti-competitively. In
prepared statements before a House communications and technology subcommittee hearing today in Washington, Netflix put it rather succinctly:
“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, said in testimony submitted for today’s hearing.
The result has been a DOJ investigation into not only whether cable is involved in anti-competitive behavior against over the top video operators, but whether cable companies are violating antitrust laws by conspiring to keep prices high. For his part, former FCC boss turned cable industry lobbyist Michael Powell this week insisted that any claims of anti-competitive actions by the cable industry are "flatly wrong." At one press hearing this week, Powell asked "Why would you want to frustrate consumers?"
