Comcast Tack on the Net A Tough Sell in Us Probe

Comcast went public in 1983. Track its share price, and you'll see that it tootled gently upward as the company expanded its cable television service around the country.

Then, in 1997, the share price spiked. This was the year the company began testing a new product - the cable modem, which offered Internet access at a blazing 1.5 megabytes per second, then 50 times faster than dial-up. Comcast didn't invent the Web. It didn't invent the cable modem, either. Like other cable operators, it happened to own the right network at the right time.

That history is helpful to remember as the Department of Justice begins an antitrust probe into whether Comcast, Time Warner and other cable providers are now trying to manipulate the way customers use the Internet - specifically, whether imposing caps on the amount of data people can download monthly discourages them from using Netflix, Hulu and other rival online video sites and steers them to the cable companies' own video-on-demand services, which aren't subject to the caps.
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Managed network

Comcast spokeswoman Jennifer Khoury declined to comment on the
investigation. In a May 15 blog post, Executive Vice President Tony Werner
explained how Comcast is offering video over its own "managed network" via
Microsoft's Xbox: "We provision a separate, additional bandwidth flow into
the home for the use of this service - above and beyond, and distinct
from, the bandwidth a customer has for his or her regular Internet access
service."

Comcast's defense of this tiered system rests on a semantic distinction:
that there's a difference between watching a movie through Netflix, which
exists on what the cable companies call the "public Internet," and
watching the same movie through a provider's on-demand service, which they
say is a private network.

In pushing the phrase "public Internet," Comcast and other Internet
providers want customers to accept that they are the proprietors of
separate, special Internets. You can see this in the way they've tried to
rebrand the Web as a private product. Comcast refers to its Web access as
"Xfinity." AT&T calls it "U-Verse." Verizon doesn't sell Web access,
either. It sells "FiOS."

Of course, these are just fanciful names for the Internet. "It's a very
slippery thing," says Michael Calabrese, senior research fellow with the
Open Technology Institute at the New America Foundation, a think tank. "It
is one pipe - and they control the pipe."

There's a reason it's not called the Comcasternet. The Internet beat out
rival private networks because it grew faster and created more value.
Comcast was perfectly free to build the Comcasternet, but it didn't.

That's not an accident. Every network benefits when all networks
interconnect. For cable companies to claim now that they did in fact build
private networks and that they shouldn't be subject to the same rules as
the rest of the Internet is a tough sell.

It's hard to blame them for trying. They've had luck with this line of reasoning before.

Information services

In a 2005 Supreme Court case, Comcast, among other cable companies,
maintained that the Federal Communications Commission couldn't regulate
them as "telecommunications services" - Internet access providers -
because cable companies bundled their Internet access with what the FCC
considered "information services," such as Web hosting and e-mail
addresses.

The justices agreed, 6-3. But in a dissent, Antonin Scalia ridiculed the
argument with a withering analogy.

A pet store "may have a policy of selling puppies only with leashes, but
any customer will say that it does offer puppies," he wrote. "Because a
leashed puppy is still a puppy."

Now, as then, the cable companies insist they're not puppies, and they
don't want to be leashed.