Sony Holds Off On Video Service Due To Data-Cap Concerns

Most home broadband users probably aren't about to run up against their bandwidth caps any time soon, considering that those caps tend to be fairly generous -- for now, anyway.

But that doesn't mean the caps have no impact. Already, there are indications that companies are taking data caps into consideration when making decisions about launching new services -- including services that could encourage cord-cutting.

Consider, this week Sony Network Entertainment executive Michael Aragon said his company is holding off on a new streaming video service due to uncertainty about broadband caps, Varietyreports. Specifically, Aragon said Sony was waiting to see whether regulators bless Comcast's decision to allow XFinity subscribers to stream shows to the XBox without having the data count toward the 250GB monthly cap.

"These guys have the pipe and the bandwidth," Aragon reportedly said. "If they start capping things, it gets difficult.”

Aragon isn't the only one to question Comcast's decision. Last month Netflix CEO Reed Hastings accused the cable giant of violating neutrality principles. "I spent the weekend enjoying four good internet video apps on my Xbox: Netflix, HBO GO, Xfinity, and Hulu," he wrote in a Facebook post. "When I watch video on my Xbox from three of these four apps, it counts against my Comcast internet cap. When I watch through Comcast’s Xfinity app, however, it does not count against my Comcast internet cap. ... In what way is this neutral?"

Of course, whether Comcast is acting neutrally and whether it's violating the net neutrality regulations are different questions. The Federal Communications Commission's neutrality order prohibits wireline providers from discriminating when transmitting traffic over the Internet. But Comcast says the XFinity for XBox App streams programs over its "private IP network," not the public Web. Comcast also says that the app functions as an additional cable box.

Meanwhile, advocacy group Free Press says that Aragon's comments show that the government needs to step in. "Comcast's unnecessary, arbitrary and discriminatory data caps are holding back innovation and competition in the video market," Free Press policy director Matt Wood says in a statement. "Caps simply don't do anything to manage supposed network congestion. Sony says it's waiting for clarity from regulators; now it's time for the FCC and Congress to give innovators the certainty they need by signaling they will not tolerate discriminatory use of data caps.”

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