Recently it came to light  that when Comcast customers are able to stream Comcast Xfinity video to their Xbox360s, it will not count against their data cap. This decision is a perfect example of the behavior that net neutrality rules were designed to prevent AND raised additional questions about the true motivation behind data caps.
If you have an Xbox360, there are a lot of ways you can watch Internet video right on your TV. You can watch your favorite game on ESPN, catch up on TV shows with HuluPlus, or choose from Crackle, EPIX, Netflix, TMZ, or Zune Video.
If you’re a Comcast customer, of course, you have to watch what you watch. Comcast’s broadband comes with some fine print: data caps. With data caps, you might find your internet cut off if you use too much of the service you thought you paid for (do it twice and you will be cut off for a year ).
Of course, in addition to selling access to the internet, Comcast also sells pay TV subscriptions. These pay TV subscriptions are finding new competition from internet-based “over the top” video services like Netflix. Since data caps seem tailor-made to keep people away from Comcast’s video competition, they’ve always seemed a little bit suspect. This new announcement helps to highlight why.
Let us start with the net neutrality (or, in FCC speak, Open Internet) concerns. Net neutrality is designed to prevent internet service providers (ISPs) from leveraging the fact that they control the pipe to your house for anticompetitive ends. As the FCC has explained, “broadband providers have incentives and the ability to discriminate in their handling of network traffic in ways that can harm innovation, investment, competition, end users, and free expression.”
The concern is essentially this: since many ISPs are in businesses besides internet access (for example, paid video services), they may try and use their control of internet access to protect their other businesses.
Today’s announcement turns these concerns from theoretical to concrete. Comcast has transformed the competitive online video marketplace into a two-tiered world, where its own online video doesn’t have to play by the same rules as everyone else’s. This is pretty bad--the internet should reward the best services, not the ones with the right corporate owners.
Fortunately, there’s a lot that can be done about this. First, the FCC should determine whether this discriminatory behavior violates its already-existing net neutrality rules. There’s no use having rules if you won’t enforce them.
Second, the FCC should finally act on our multiple  requests  to ask some simple questions about data caps. How are the caps set? Once they are set, how are they evaluated? Going forward, what would cause them to change? If you think these sound like reasonable questions, click here  and tell the FCC to ask them.
Finally, if you’re a Comcast customer, you should complain. Comcast is doing you no favors by giving its proprietary video service special treatment.
Make no mistake, it’s good that Comcast has finally realized that online video is an important market that it should participate in. But it would be better if it had confidence that its services could succeed without cheating.