Earlier this month, the advocacy group Public Knowledge urged the Federal Communications Commission to investigate Stream TV, Comcast's new $15 a month video service for cord-cutters.
Stream TV enables Comcast's broadband customers to access many of the same programs as its cable customers, including all broadcast channels and HBO.
When people watch videos through Stream, those programs don't count against their data caps. Comcast currently subjects 15% of its customers to "usage-based billing," meaning that they can only consume 300 GB of data a month before incurring 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. The organization argues that Comcast's decision to exempt Stream from consumers' data allotments harms other online video providers -- like Sling TV, Netflix, or Amazon Prime -- by making their services less appealing.
This week, Comcast fired back in a new FCC filing. The company mainly argues that Stream is a "cable" service, not subject to net neutrality rules, as opposed to an Internet service.
But Comcast also argues that Stream doesn't violate either the letter or spirit of the net neutrality rules.
"There is nothing about Stream TV that unfairly disadvantages OVDs or otherwise harms competition in a way that could support a Commission finding that somehow Comcast’s offer of Stream TV violated the Internet General Conduct standard or any other Open Internet rule or policy," Comcast argues.
The company goes on to make two arguments that supposedly show it doesn't zero-rate Stream in order to give itself an advantage over other online video providers.
The first is that its ads don't mention that Stream TV is exempt from usage-based billing: "If the exemption of cable services like Stream TV from Comcast’s UBB trials were designed ... to entice customers to use cable service in lieu of online video services, it is curious that Comcast has never marketed it as a 'benefit' of Stream TV or any of its other cable services," Comcast says.
Second, Comcast first introduced Stream TV in markets that don't currently have broadband caps. The company says choosing those locales "would have made little sense if the exemption from Comcast’s UBB (usage-based billing) trials were intended to be a core attraction of the Stream TV service."
Both of those points may be true, but it's questionable how persuasive they are. Comcast's early ads for Stream TV obviously wouldn't be expected to tout the data-cap exemption, given that the service currently is only available in markets that don't have those caps.
What's more, Comcast has been very clear that it intends to offer Stream TV nationwide -- including to markets with usage-based billing. The company also has been expanding its use of data caps, and there's no reason to think that trend will reverse.
Still, whether Comcast's decision to zero-rate Stream runs afoul of net neutrality rules is unclear. The rules include a "general conduct" standard that broadly bans Internet service providers interfering with people's ability to access Web content, but the FCC has never said that zero-rating violates that standard. Instead, the agency says it intends to decide that question on a case-by-case basis.