Comcast's new broadband video offering, Stream, threatens to transform online video from "an open and competitive market to one dominated by cable incumbents."
That's according to the advocacy group Public Knowledge, which is asking the Federal Communications Commission to order Comcast to revise its approach to Web video.
Last November, Comcast unveiled Stream, a $15-a-month service that enables broadband-only subscribers to access many of the same programs that cable customers can watch; the lineup includes all broadcast channels and HBO.
Critically, videos watched through Stream are exempt from the company's hugely unpopular usage-based billing, which now affects 15% of Comcast's customers. People subject to usage-based billing can only consume 300 GB of data a month before they're charged overages of $10 per 50 GB. (Comcast also is allowing subscribers in some markets to pay an extra $30 or $35 a month for unlimited data.)
Public Knowledge wants the FCC to order Comcast to either stop capping broadband data or to stop zero-rating Stream.
Among other arguments, Public Knowledge says Comcast's decision to exempt Stream from the caps harms other over-the-top providers -- like Sling TV, Netflix, or Amazon Prime -- by making their services less appealing.
"Stream TV is not competing through the quality of the overall offering or through a novel business model, but through employing billing practices that are not available to unaffiliated services," Public Knowledge writes in a complaint filed last week with the FCC.
The group also rightly points out that the decision to zero-rate Stream is a boon for one and only one reason -- Comcast's entirely arbitrary decision to cap data in the first place.
"Comcast frames giving 'free data' to consumers who stay inside its walled garden as a benefit, but this benefit is little more than a remedy for a problem that Comcast itself created," Public Knowledge writes.
At this point, it's not clear whether the FCC will say that data-cap exemptions violate net neutrality rules. Those rules prohibit broadband providers from blocking or degrading service and from creating online fast lanes. The regulations also broadly ban Internet service providers from engaging in conduct that interferes with people's ability to access Web content. Zero-rating could potentially violate that prohibition depending on the circumstances; the FCC has said it intends to take a case-by-case approach the question.
For its part, Comcast insists that Stream is not an Internet service, and therefore is not subject to net neutrality restrictions.
"Our Stream TV cable package does not go over the Internet, so it can’t possibly violate a condition which only applies to Internet content," a spokesperson states.
"Stream TV is delivered as a cable service on the same private, managed network that delivers all our other cable television services in the home, and is subject to all the regulations that apply to our other cable TV services such as franchise fees ... closed-captioning, and emergency alerts."
But Public Knowledge questions this conclusion, arguing that "loopholes" and "regulatory shell games" don't legitimize Comcast's decision to zero-rate the streams.
"Comcast, if allowed to continue, will expand its efforts, harming competing online video providers and ultimately reducing the choices available to consumers, raising their prices and decreasing the quality and diversity of programming they can access," the group says.