Franken: Comcast thumbs nose at Net neutrality rules

Senator Al Franken says Comcast may be violating Net neutrality rules by exempting its own video service from a usage cap on its broadband network.

The Minnesota Democrat today sent a letter to the Federal Communications Commission and the Department of Justice asking the agencies to take a closer look at a new service Comcast announced in March that will stream Xfinity on-demand content to Microsoft Xbox consoles.

The content that is streamed directly to the Xbox console will not be counted against subscribers' total bandwidth usage caps.Comcast now imposes a 250GB monthly data cap on its subscribers.

This has angered some so-called over-the-top video providers such as Netflix that offer a service allowing consumers to stream movies and TV shows over their home broadband connections. Netflix CEO Reed Hastings says that Comcast's plan to exempt its own Xfinity content from the cap gives an unfair advantage to Comcast's own video content. He and consumer advocates say that this violates the Net neutrality rules that Comcast had to agree to as part of the conditions for its merger with NBC Universal. The rules prohibit broadband providers from favoring their own content on the open Internet over that of their competitors.

In his letter, Franken said he was dismayed to learn that Sony Entertainment Network was considering not offering its Internet TV service because it was afraid that Comcast would impose data caps on its competitors.

But Sena Fitzmaurice, vice president of government communications for Comcast, argued that since the service doesn't go over the public Internet, it is not violating those Net neutrality rules:

Comcast and NBCUniversal are fully complying with (indeed exceeding) the transaction orders as detailed in our recently filed Annual Compliance Report.

Comcast's On Demand service, a service used hundreds of millions of times by our customers every month for the past several years, is indisputably part of our Title VI cable service which is not subject to the FCC's Open Internet Rules - and we are not aware of anyone who has taken a contrary view. When Comcast streams its own services over the open Internet (including XfinityTV.com or nbc.com), such streaming is subject to Comcast's broadband Internet data usage standards. But the Xfinity app for the X-Box does not stream content over the open Internet and is also part of our Title VI cable service. As such, it is not subject to the FCC's open internet rules.

Still, Franken said in his letter that even if Comcast is not technically in violation of the rules, its intent is to favor its own services over services offered by potential competitors.

"Even if this does not amount to a technical violation, it certainly raises serious questions about how Comcast will favor its own content and services to the detriment of its competitors. Comcast's actions will almost certainly drive consumers to Comcast's Xfinity Streampix, rather than other Internet video streaming services, which I fear will thwart your agencies' efforts to create an open and level playing field for current and future competitors of Comcast."

Franken also urged the FCC and DOJ to further examine other complaints against Comcast for not complying with conditions that were required by the agencies for the acceptance of its merger with NBC Universal.

"When the Obama administration signed off on Comcast's merger with NBC Universal, it laid out a set of rules to prevent Comcast from squashing its competitors -- including popular cable alternatives -- and hurting consumers who have seen rapidly rising cable rates over the last several years," Franken said in a statement.

He urged the FCC and DOJ to investigate these allegations and to impose "significant penalties" if violations are found.

Comcast says it is complying with the conditions and that there is no basis for these complaints.

"The one complaint by an outside party regarding the NBCUniversal FCC Order has been brought by another very large media company, Bloomberg LLP - and it has been preliminarily adjudicated," Comcast's Fitzmaurice said in a statement. "We respectfully disagree with the Media Bureau's interpretation believe the full Commission will agree on appeal to enforce conditions as they were originally negotiated and intended."

Correction 4:11 p.m. PT: A previous version of this story incorrectly referenced the division of Sony that had planned to offer a streaming TV service.