Public Knowledge has filed a complaint with the FCC over Comcast (NASDAQ: CMCSA) excluding its Stream TV OTT service from its customers' data caps. The complaint says the zero-rated service doesn't gel with the FCC's Open Internet rules and also violates Comcast's NBCUniversal merger commitments.
Public Knowledge calls Stream TV's zero-rating practice "illegal" regardless of whether the service is classified as a non-broadband, specialized or MVPD service. The complaint also alleges that Comcast is creating an "artificially low usage cap" by making the service unlimited and that it would cost much more than Stream's $15 monthly rate to pay both $35 for unlimited Internet access to Comcast and subscription fees to services like Netflix (NASDAQ: NFLX) and Hulu.
In addition to running afoul of net neutrality rules, Public Knowledge says Comcast's zero-rated service violates NBCUniversal merger conditions set by the FCC and Justice Department, requiring Comcast to count traffic from competing video services the same as it counts its own so the MSO doesn't "unfairly disadvantage online video."
Public Knowledge urged the FCC to stop the Comcast from zero-rating Stream and offered up potential solutions to Open Internet concerns with the practice.
"Because Comcast's illegal behavior would harm the video marketplace and viewers, we've asked the FCC to stop it. For example, Comcast could eliminate its broadband cap and return to unlimited plans, or Comcast's customers -- and not Comcast -- could select which services to exempt from metering. We urge the FCC to take quick action to protect consumers and competition in the emerging online video marketplace."
Comcast reiterated that Stream TV is a cable service delivered over the MSO's private, managed network and is subject to all the regulations that apply to its other cable TV services such as franchise fees, PEG requirements, closed-captioning, and emergency alerts.
"Just as when addressing similar issues in the past, Public Knowledge doesn't have the facts straight. Our Stream TV cable package does not go over the Internet, so it can't possibly violate a condition which only applies to Internet content. Customers do not access Stream TV through their broadband service. Period. Public Knowledge saying so over and over does not make it so. The bottom line is that Stream TV doesn't violate any FCC or DOJ requirement from our NBCUniversal deal, just as the complaints they filed over three years ago which the FCC declined to take action on did not," Comcast said in a statement.
Controversy of zero-rated services has extended beyond the traditional pay-TV business. T-Mobile's (NYSE:TMUS) Binge On feature, which allows its mobile subscribers to stream video from numerous OVD services without counting against their data caps, has been called out for seemingly flying in the face of the Open Internet rules. Likewise, Verizon's (NYSE: VZ) plan to zero-rate its OTT service Go90 for its mobile subscribers through its FreeBee sponsored data program, has drawn critical responses. Verizon CFO Fran Shammo confirmed that Go90 will be taken off Verizon subscribers' data meter beginning this week.
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