* Justice investigating programming deals, Internet caps
* Comcast's NBC acquisition probed for breaches
* Netflix complained Comcast blocking competing services
By Ronald Grover
LOS ANGELES, June 13 The U.S. Department of
Justice is investigating whether cable television companies are
improperly suppressing competition from Internet companies and
online video services, according to two people with direct
knowledge of the probe.
The wide-ranging probe centers on cable companies'
long-standing practice of bundling channels into a single
package and requiring subscriptions to access certain online
content, one of the sources said on condition of anonymity
because the inquiry has not been made public.
Justice Department investigators are also examining whether
Comcast violated a 2011 consent settlement under which the cable
operator is prohibited from "unreasonably discriminating in the
transmission of an online video distributor's lawful network
traffic," according to the second of the sources, who has
knowledge of the government's information collection.
"I've been saying to myself that the cable companies are in
trouble. Who needs TV?" said John Briggs, an antitrust attorney
with Axinn, Veltrop and Harkrider LLP. "Any program I like is
probably on Netflix."
The investigation also encompasses the industry's practice
of inserting "most favored nation" clauses into contracts, which
secure for cable operators the lowest prices on content,
according to the second person.
Justice Department officials will additionally look at the
use of caps to limit the amount of data consumers can download
each month, a practice that online competitors such as Netflix
have complained would block adoption of data-intensive
services, according to the Wall Street Journal, which first
reported the investigation.
Earlier this year, Netflix Chief Executive Reed Hastings
complained in a Facebook post that Comcast - the No. 1
cable services operator - gave its own Xfinity video service
priority over online services offered by Netflix, Hulu and
Comcast has since lifted "caps" on how much capacity its
users can employ monthly, the core of Hastings' complaint.
"We have consistently treated all video carried over the
public Internet the same whether it comes from our sites or
anywhere else on the public Internet," the cable operator said
in a corporate blog at the time it changed its policy.
Comcast and the Justice Dept both declined to comment on
The cable operator has spent $4.6 million on lobbying so far
this year, more than any other technology company aside from
Google, which has spent $5 million, according to the
Center for Responsive Politics.
The five largest media companies, including content
producers such as Walt Disney and cable operator Time
Warner Cable, spent $10 million to influence Washington.
The five largest technology companies, including Apple
and Microsoft, spent a combined $8 million.
Cable operators were receiving letters requesting they meet
with Justice Dept as recently as two weeks ago, said one of the
"The Department of Justice has a specific hook sunk deep
into Comcast, which is their consent decree," said Mark Cooper,
director of research at the Consumer Federation of America.
"They are a leader in broadband. It is fully understandable that
they are going to test the limits."