Justice Department antitrust probe could benefit consumers

— -- The Department of Justice has launched an antitrust investigation to determine whether Comcast and other cable television companies are illegally stifling competition from online video providers, such as Hulu and Netflix, The Wall Street Journal and Bloomberg News reported Wednesday, citing people familiar with the matter.

Justice and Comcast declined to comment. USA TODAY could not confirm the investigation.

The largest U.S. cable companies, including Comcast and Time Warner, limit the amount of data their customers can view from video services and charge extra when customers exceed those caps. Justice is investigating whether those limits put competing video services at a competitive disadvantage, whether cable companies favor their own content, and whether consumers are harmed, said the sources, who weren't authorized to speak publicly about the matter.

While the investigation is still in its infancy, several industry experts weighed in on how it could change the scope of online video content.

Q: What are data caps?

A: Cable companies such as Comcast use data caps to limit the amount of some providers' video content that users watch online each month. If users exceed the limit, they are charged a fee.

Q: Why did Justice launch an investigation?

A: Cable companies may be using data caps to discourage consumers from using online video services such as Hulu and Netflix in hopes that they will stick to their subscriptions and continue the tradition of buying packages of channels instead of one program or channel offered by a separate provider.

Q: Is there evidence of that?

A: In March, Microsoft unveiled that Comcast, HBO GO and MLB.tv would be accessible on the Xbox system through Comcast-owned Xfinity. Comcast said that videos watched on those channels would not count against the data cap. This "policy gives its own service a privileged free ride on its own broadband network, though it charges bandwidth tolls for every other service that uses the same connection," wrote senior partner Colin Dixon on OTTmonitor.com in March.

Q: Has the probe led to any changes so far?

A: Not yet. They have yet to submit a report or release any information regarding their efforts. But the investigation should serve as a stern warning to cable companies that they can't think they can do anything they want, says Phillip Swann, president of TVpredictions.com.

Q: What could happen if nothing changes?

A: "If cable companies are allowed to give themselves advantages that other companies don't have, the other companies will just go away," says Art Brodsky, communications director for public interest group Public Knowledge. "The goal should be to get as many different options in front of consumers as possible, to develop as much competition as possible."

Q: What could happen if the government steps in?

A: If the Department of Justice decides on new regulations for cable companies once the investigation is concluded, consumers could be protected by rules that would prevent excessive fees through data caps, Swann says. "It would be a guard against consumers being gouged or having to be charged excessively for using popular services such as Netflix and Hulu."