The battle between Netflix and Comcast continues.
Not long ago, Netflix CEO Reed Hastings criticized Comcast for some of the company’s broadband policies. Though using most legal online video services counts towards the Comcast data limit, Hastings complained, using Comcast’s own service, Xfinity, does not. The policy gives Comcast an unfair advantage over Netflix and other competitors, Hastings argued.
Comcast responded by saying that Hastings’ criticism was not valid, citing the fact that Xfinity data is carried over the cable TV portion of a subscriber’s connection, rather than over the Internet. Comcast has also announced that it is switching its 250GB monthly data cap for a tiered model that employs a higher cap and a method to purchase extra data.
The company is currently preparing two trials in different markets. Both will impose a 300GB cap with a $10 charge for each 50GB beyond the cap, but one trial will increase the cap with faster tiers of Internet service. To put the new charge into perspective, consider the policies of many mobile phone service providers. Smartphone users are often faced with penalties of $10 for just a single GB of extra data usage.
In other words, you can download as much as you want, as long as you’re prepared to pay the fees. “This will effectively offer unlimited use of service,” said Comcast executive VP David L. Cohen. “Customers can buy and use as much data as they like.”
So far, opinions are divided on the new policy. FCC Chairman Julius Genachowski said that tiered broadband Internet plans would be “healthy and beneficial” for the broadband and high-tech industries. “Business model innovation is very important,” Genachowski commented. “There was a point of view a couple years ago that there was only one permissible pricing model for broadband. I didn’t agree.”
Others, like Free Press Policy Director Matt Wood, disagree. “The data caps being pushed by the biggest cable companies are bad for consumers — and the FCC should be investigating these caps, not endorsing them…. Cable companies use them to penalize their subscribers and discourage them from using innovative services that compete with cable TV.”
Netflix has called the changes "a small step in the right direction," but pointed out that Xfinity still gets special treatment. And in other good news, Comcast is making some positive changes for its customers. The company will soon share Wi-Fi hotspots across the country with three of its largest cable rivals, Time Warner Cable, Cablevision, and Cox Communications.