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Time Warner Cable’s new Xbox app won’t count against data caps

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Time Warner Cable launched a new app on the Xbox (s MSFT) 360 Tuesday that gives subscribers of the pay TV provider access to live feeds from up to 300 TV channels, including programming from networks like ABC (s DIS), FOX (S NWS) and Comedy Central. (S VIA) The announcement comes after Verizon (s VZ) and Comcast (s CMCSK) launched similar apps on Xbox – and just like Comcast’s app, it may cause some controversy. That’s because Time Warner Cable decided that any video viewed through the app won’t count against a subscriber’s data cap.

Time Warner Cable acknowledged as much when asked about it by GigaOM Tuesday, with a spokesperson emailed us: “This isn’t an Internet offering.”

That’s the same argument Comcast used when it came under fire from net neutrality advocates and competitors like Netflix (s NFLX) for not counting the bandwidth consumed by its Xbox 360 app against its subscribers’ data cap. Comcast said at the time that any videos viewed via the app would be delivered via the company’s private IP networks, and not through the public internet.

As my colleague Stacey Higginbotham wrote last year, that may technically be true – but also points to a bigger problem of what’s wrong with net neutrality regulation in this country. It essentially allows ISPs to provide internet-like services but facilitate those services over the ISP’s own managed networks, thereby putting them out of reach of regulators.

It’s worth pointing out that Time Warner Cable doesn’t impose caps on all of its customers. Instead, the ISP started offering discounted value plans for people who use very little data. Customers who opt into the 5 GB per month Internet Essentials plan get an $8 discount on their monthly bill, whereas the 30 GB per month plan gets consumers a $5 discount. Users that go over these caps have to pay $1 per additional GB.

A Time Warner Cable spokesperson was quick to point out that both plans are voluntary. But as Stacey has pointed out before, plans like these aren’t that great of a deal for consumers – and in the end, they may also put competitors to a cable company’s TV business into a significant disadvantage.

Photo courtesy of (CC BY 2.0) Flickr user The Consumerist.

4 Responses to “Time Warner Cable’s new Xbox app won’t count against data caps”

  1. Richard Bennett

    Janko, I think you and Stacey are a bit unclear on the concept of net neutrality. You criticize the FCC’s net neutrality rules for their consistency with the concept of net neutrality as Tim Wu defined it in his seminal paper, “Network Neutrality, Broadband Discrimination” ( Wu considers that users benefit from various forms of management and discrimination within local networks:

    “Proponents of open access have generally overlooked the fact that, to the extent an open access rule inhibits vertical relationships, it can help maintain the Internet’s greatest deviation from network neutrality. That deviation is favoritism of data applications, as a class, over latency-sensitive applications involving voice or video. There is also reason to believe that open access alone can be an insufficient remedy for many of the likely instances of network discrimination.”

    Video streaming that begins and ends within a carrier’s network is outside the scope of net neutrality by definition, as the only thing net neutrality seeks to ensure is that all Internet-based services are treated the same. Because of the Internet’s intrinsic bias toward “data applications” there will always be a need to provide other kinds of applications in ways that differ from Internet norms. This is very clear with voice and mobile networks, but somewhat less clear with VOD. But a somewhat different issue arises in this space.

    While TWC and the other cable companies don’t incur the same expenses in the delivery of their licensed content to users that they incur in delivering Netflix, they incur other costs in the form of licenses. So it’s reasonable for them to deliver their own licensed content from local servers without regard to data caps in order to recoup license fees.

    This sort of grey area was explicitly considered when the FCC’s rules were drafted, so there’s really nothing shocking about it.

    • John Nemesh

      The problem is that by not counting Time Warner’s own video services towards their (arbitrary, money grubbing) bandwidth caps, they are putting competing internet video services like Netflix at a competitive disadvantage. If you want to watch Time Warner content, no additional charge…but fire up a Netflix movie, and you will have to pay extra. How many people would sign up for Netflix, if it cost them an extra $2 or $3 in overage fees to watch a movie?

      • Guest701

        I don’t see the problem. There is the difference between an Internet service (any service / best effort) and a cable TV service (dedicated TV service). They didn’t charge me before to deliver cable video to one set top box. Why should they charge me to deliver it to a different one?

        They only ones unhappy about this is Netflix. They want all the infrastructure to deliver a dedicated cable TV service without any of the investment required to build it.