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Summary:

Sony has big plans for a competitive home video service to compete with programming offers from the cable and satellite companies – or maybe I should say ‘had’. Those plans are on hold until regulators decide if Comcast can keep prioritize its content over everyone else’s.

family watching TV

Sony has big plans for a competitive home video service to compete with programming offers from the cable and satellite companies – or maybe I should say ‘had.’ Speaking at a Variety conference on Monday, Sony SVP and GM Michael Aragon said those plans are on hold until regulators determine whether Comcast can keep prioritizing its own Internet video traffic over others’, Ars Technica reported.

“These guys have the pipe and the bandwidth,” Ars Technica reported Aragon as saying. “If they start capping things, it gets difficult.”

At issue isn’t just the 250 GB monthly cap that Comcast has imposed on its residential broadband customers, but the fact that it’s making exceptions to that cap. Content streamed to Comcast’s Xfinity app in the Xbox is off the meter, while content coming from other providers is counted against that monthly allotment. While Netflix , Sony and other over-the-top video providers aren’t happy with the situation, my colleague Stacey Higginbotham writes that Comcast may be well within its rights, since it’s using its own infrastructure to deliver the Xfinity service and can therefore treat it as a special case.

However, as my colleague Daniel Frankel at paidContent proposes, Comcast may be biting the hand that feeds it. Providing broadband services, which in turn bring third-party content into the home, is turning out to be a much better business model for cable operators than providing that content on their own. Cable providers are losing video customers and finding their programming margins squeezed, but those same customers remain willing to pay big bucks for raw broadband access.

Picture courtesy of Flickr user brizzlebornandbred.

  1. It’s hard to find an analogy that works, but I’ll try by saying that forcing cable providers to eliminate caps for OTT providers would be akin to forcing cab companies to pay for the gas of buses in their local market.

    Cable companies spend millions installing, maintaining and upgrading their networks to provide highspeed Internet and video services to their customers. Perhaps some kind of cost/byte could be determined and the cable companies could in essence become “type-2″ carriers for these types of services but today that doesn’t exist.

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  2. Louis Cabeza Thursday, May 3, 2012

    Hmm, it’s a bit of turnabout, isn’t it? The big media companies were thrilled with horrendous download speeds and data caps in the US when it served their interests (slowing online piracy). Now, theyre finally making baby steps towards updating their business models, and, wahhhh, the cable providers have already started to muscle in on their territory. Crocodile tears all around. The US economy is suffering tremendous productivity losses because of this game of limiting data to squeeze every penny of profit out of tired business models.

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