Will Comcast's New Xbox Service Hurt Netflix?

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Comcast this week rolled out a new free service allowing customers who subscribe to both Xfinity Internet and Xfinity Digital Video to watch TV on demand on their Xbox 360 consoles.

While that sounds like a nice feature for subscribers, Comcast's move potentially hurts Netflix, Hulu Plus and other companies that offer video to Xbox users. That's because programs viewed through the Xbox 360 won't count against Comcast subscribers' broadband data caps, currently set at 250GB per month. "Since the content is being delivered over our private IP network and not the public Internet, it does not count against a customer’s bandwidth cap," the company says in an FAQ about the offering.

Advocacy groups Public Knowledge and Free Press both pointed out that such a structure gives Xbox 360 users an incentive to favor Comcast's video service over that of competitors. "The Xbox 360 provides a number of video services to compete for customer dollars, yet only one service is not counted against the data cap -- the one provided by Comcast," Public Knowledge said in a statement.

The group renewed calls for the Federal Communications Commission to examine data caps more broadly.

Free Press likewise criticized Comcast, arguing that the company was violating the spirit, if not the letter, of neutrality rules. The FCC's neutrality order prohibits Internet service providers from discriminating against content providers.

"Comcast tries to justify preferred treatment for its own video on the Xbox 360 by claiming that the content is delivered over a private IP network rather than the public Internet," Free Press policy director Matt Wood said in a statement. But not counting this video against a Comcast customer's monthly data limit gives the Comcast product an unfair advantage against other Internet video services."

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2 comments on "Will Comcast's New Xbox Service Hurt Netflix?".

1. Robert Repas from Machine Design Magazine
   

   commented on: March 28, 2012 at 10:09 a.m.
   This was the exact outcome I predicted when data caps were first proposed several years ago. Companies that control the flow of information would always give their data precedence over any other by removing any imposed limits on the info they themselves supply. It's time the FCC gets off their collective sedentary derrieres and puts the Internet BACK into the Title II Communications Act as it was until 2005 to assure a level playing field among all participants. Either it all counts against the cap, or none of it from anybody counts. (And why am I not surprised that it's Comcast taking the lead in this?)
2. Tanya Callaway from First Touch Communications
   

   commented on: March 29, 2012 at 9:31 a.m.
   This is great for consumers! I think this is a step in the right direction, as content providers, urge customers to the cloud. The fact that Comcast is not counting the data usage against the subscriber also challenges other services providers to re-evaluate the hidden cost with the "bring your own bandwidth" now that consumption based models are the norm. This will encourage people to use the OnDemand offerings, and Comcast can focus on providing content. And transport, not in home devices. It also is great for consumers, as they are saving money on the set top devices monthly rental fees. I mean when was the last time you saw a re-design of a cable box? And does Comcast really want to be in the managing devices in the home business. As quality decreases, in-home device support costs rise, why not pass that over to the Consumer electronics and the gaming industry? They have the infrastructure for self service firmware and software updated via the internet. They have user support groups and communities. Most importantly, they have the business processes to adapt to disruptive technologies that are introduced into the market at a faster rate, and which are expected to be supported by all service providers, regardless of vertical.

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