The Justice Department is launching a large-scale antitrust investigation into whether cable companies are colluding to alter their data packages to force consumers to watch fewer videos online, the Wall Street Journal reported this morning.
Justice Department officials have already spoken with online video providers such as Netflix Inc. and Hulu LLC, the report says. Also, investigators are questioning Comcast Corp., Time Warner Cable Inc. and other cable companies about setting caps on the amount of data a subscribers can download each month.
Many cable companies provide consumers with access to broadband internet and bundles of TV channels. By creating a cap to the amount of data a subscriber can download online each month, some lawmakers say cable companies are hampering customers’ ability to watch programming online.
On Tuesday, Verizon Wireless announced its new pricing plans for mobile phones and data, provoking outrage from some data users.
Al Franken (D-Minn.)
At a Senate Judiciary Committee hearing on Tuesday, Sen. Al Franken (D-Minn.) told Attorney General Eric Holder he was “worried that Verizon Wireless’s agreements with major cable companies will make it even harder for consumers to cut the cable cord and shift to watching more video online.”
He continued: “This is particularly true if companies stop offering affordable standalone broadband service, as Verizon just announced, and if companies like Comcast impose discriminatory data caps. Is the department taking a close look at these issues?”
The Attorney General said on Tuesday that the department is continuing to monitor the situation.
