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Comcast’s Stream TV service sparks net-neutrality controversy

Federal Communications Commission Chairman Tom Wheeler (right) and commissioner Mignon Clyburn attend a FCC Net Neutrality hearing in Washington earlier this year.REUTERS/File

It turns out that Comcast's new video app, Stream TV, comes with a big asterisk: If you have access to the service and you are one of the growing number of customers who has to abide by Comcast's 300-gigabyte monthly data cap, Stream TV won't count against it. In essence, you'll be able to watch as much Stream TV as you want and never hit your limit.

While "unlimited" may sound enticing, critics are seizing on the program as a potential violation of net neutrality - the rules passed by the federal government earlier this year that seek to prevent Internet providers from unfairly favoring some online content, including their own, over that of others. If big cable and telecom companies were allowed to do this, they could unfairly crush competitors and make it hard for consumers to get rival services from Netflix or a start-up, these critics worry.


But, likely to the alarm of net neutrality advocates, the government's rules might not even apply to Stream TV - and that's exactly how Comcast hopes regulators will see it.

"This is a cable video service" not cable Internet service, said Comcast spokesperson Lisa Scalzo Thursday.

That might seem like a meaningless distinction, but it could make all the difference. That's because the government's net neutrality rules only cover some digital communications, while leaving other types out. If Comcast can successfully argue its point, then the FCC may be unable to bring its net neutrality rules to bear against Stream TV, even if it might want to.

Comcast isn't the only one that offers unlimited consumption of streaming content. T-Mobile offers a streaming music program called Music Freedom and a suite of channels such as HBO, Netflix, ESPN and others called Binge On. Both of these offerings don't count against customer data caps. But these programs are covered by net neutrality rules because consumers access the content through broadband connections on their smartphones and tablets (while Stream TV is different, Comcast says; more on that in a bit).


Streaming services that sign on with T-Mobile's program get a huge potential benefit. Anybody who doesn't, gets hurt. This idea - the company that provides the data also shapes what consumers see - is what the net neutrality rules are designed to prevent.

T-Mobile chief executive John Legere has said that Binge On and Music Freedom are "highly net-neutrality friendly."

But if regulators allow such tactics to continue, it'll tilt the Internet to benefit large, established companies, argues Harvard University scholar Susan Crawford. That's why Crawford says the FCC shouldn't allow T-Mobile or Comcast to continue down this route.

On Thursday, FCC Chairman Tom Wheeler said he'd watch T-Mobile closely but that its exemption tactics didn't immediately appear to violate the net neutrality rules' key provisions.

"It's clear in the open Internet order that we said we are pro-competition and pro-innovation," Wheeler said. "Clearly, [T-Mobile's Binge On] meets both of those criteria: It's highly innovative and highly competitive."

Shannon Gilson, an FCC spokeswoman, added later that the agency is still "working to make sure it understands the new offering."

But when asked for Wheeler's views on Comcast's Stream TV, the FCC declined to comment. (There's nothing nefarious about this in itself; it's possible that the agency simply needs more time to analyze the situation.)


Even though critics see Comcast and T-Mobile as part of the same problem, there are some key differences that may lead to different outcomes. Comcast's Internet service is covered by the government's net neutrality rules. But Stream TV, Comcast says, runs over a separate part of the cable running into your house and falls under regulations that deal with cable television. And this could mean that the government will not be able to regulate Stream TV with its net neutrality rules, which are primarily aimed at Internet service.

Consumer advocates say that Comcast doesn't deserve to label Stream TV a cable video service that is exempt from net neutrality rules. If subscribers are able to watch Stream TV from outside the home, such as at WiFi hotspots, then it does indeed travel over the Internet.

"If this is a cable service, than every video online could be considered a cable service, and that's clearly not true," said Matt Wood, policy director at Free Press. "It's not something that is solely accessible through the Comcast wire."

What this back-and-forth shows is some of the deep questions facing the cable industry as it tries to adapt to an Internet future.