DOJ questions cable companies about competition with online video

The inquiry may focus on whether Comcast is living up to merger conditions set by the FCC

The U.S. Department of Justice has contacted affected companies about potentially anticompetitive behavior of cable companies toward online video services, according to a source close to the matter.

The DOJ's inquiry seems to focus on Comcast and conditions it agreed to in its early 2011 merger with NBCUniversal, said the industry source. Conditions approved by the U.S. Federal Communications Commission prohibit Comcast from disadvantaging rival online video services through its broadband service or set-top boxes.

Online video service Netflix, Public Knowledge and other groups have questioned Comcast's decision to exempt its video-on-demand service on the Xbox 360 from its broadband service's monthly data cap. Last month, Senator Al Franken, a Minnesota Democrat, questioned whether that exemption violates the merger conditions.

Comcast has defended the move, saying the video-on-demand service is part of its cable television service, and separate from its broadband service.

A DOJ spokeswoman wasn't immediately available for comment.

Comcast declined to comment on reports that the DOJ was investigating video competition. The National Cable and Telecommunications Association, a trade group, called the video market competitive.

"Consumers are the beneficiaries of tremendous choice, competition and innovation in the video marketplace with dozens of alternatives now available for viewing content on multiple devices through a variety of service options," Brian Dietz, an NCTA spokesman, said in an email. "The innovative offerings by cable companies are positive developments for consumers and represent accepted and legitimate business practices as well as sound network management."

Public Knowledge cheered the reports. Government agencies should move to protect the public interest, Harold Feld, Public Knowledge's legal director, said in a statement.

"Media and telecommunications giants, which can be one and the same, should not be able to take advantage of their size and reach to eliminate competition and to harm consumers through data caps which favor some content over other based on business relationships, through contract terms that could restrict where programming can be shown, or other means," Feld added.

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