I just read two articles on Comcast. The first is about its proposed acquisition of Time Warner. Evidently, the FCC has received some opposition to allowing the acquisition, because Comcast uses some rather monopolistic practices. More or less, Comcast and Time Warner are using their size and market share to manipulate content providers into paying for services that most ISPs gladly provide for free. Notably, one of the complaints comes from Netflix, because Comcast and Time Warner refuse to provide direct connections for free.
Direct connections to major content providers dramatically reduce internet congestion and improve the ability of ISPs to provide good quality media streaming. As such, ISPs that provide direct connections to major content providers benefit themselves and their customers dramatically. Very large ISPs, like Comcast, however, use their size to force content providers to pay for these connections. Ultimately, the content providers feel forced to comply, because without the direct connections, their services will perform poorly for customers of those ISPs. Sadly, the customers blame the content providers, even though the fault lies entirely with their ISPs.
The second problem with Comcast is its attempt to redefine language. According to Comcast, charging extra when a subscriber goes over a data limit is not technically a data cap. The FCC definition of "data cap" actually includes this kind of subscription model, with a clause explicitly exempting Comcast from this definition (the FCC working group that drafted this definition includes a Comcast VP, who presumably is responsible for this clause). Evidently Comcast's size and market share gives it the power to define language in its own terms. Note that the term "data cap" is commonly used by ISPs and individuals to mean any data limit, whether it be a hard limit or a sort of uptier limit where extra charges are applied when the limit is exceeded. It is clear that Comcast believes itself to have power to alter the meaning of language.
The second problem is worse than the first, but they come down to the same thing. Comcast's motive for using data caps* is exclusively financial. Most data caps imposed by smaller ISPs exist to combat network congestion. Comcast is large enough that it does not have congestion problems, but they would rather charge data caps to pay for upgrades than use a portion of their already very high profits to pay for them. There is another, more nefarious and legally questionable reason for Comcast's data caps though. Comcast does not count data transfers to and from its own services against the caps. This means that customers using data heavy services may feel compelled to use Comcast's services instead. Now, I do not know exactly what services Comcast offers, but I could easily imagine some examples. Note that even if Comcast does not offer a specific service, it could easily add it at a future date. The first service that Comcast could offer is a video streaming service. Video streaming from services like Hulu or Netflix are certainly data intensive, and regular use of those services could easily hit a fairly large data cap. If Comcast offered its own video streaming service, many customers might feel like they have to use Comcast's services instead of Netflix or Hulu, to avoid paying fees for exceeding the data limit. This applies equally to digital media sales services, like those provided by Amazon. Digital video files are large, and can be consumed faster than streaming video (because you can download many at a time, at a faster rate than you can view them). If Comcast offered this sort of service, a data cap would definitely give it an advantage in the market of its subscribers.
The thing that all of these problems boil down to is monopoly. Comcast is leveraging its huge market share to force content providers to pay for services that other ISPs provide for free, because they benefit both sides equally. This is a monopolistic practice. Comcast uses a data cap to increase its revenue, and gets away with it because of its huge market share. Again, this is a monopolistic practice. Lastly, and the worst of them all, Comcast uses its market share in its ISP service to gain an unfair advantage in its other services. This is an extremely monopolistic practice. In fact, large companies have frequently been punished by the government for this last practice. The MS lawsuit over its inclusion of Internet Explorer in the US (and Windows Media Player in the EU and now in China as well) was based on the fact that MS was using its Windows market share to give it an unfair advantage over other browser (and media player, outside the US) makers. This is monopolistic because it is using the popularity of one product to sell another unrelated product (internet connectivity vs internet based service, very similarly to operating system vs application). Further, it is not just abusing the market share of one product to sell another unrelated product (IE and Windows Media Player might seem free, but the price is included in the cost of Windows); it is actually putting customers in a position where they are effectively being fined or otherwise charged extra for using someone else's product too much.
Very few ISPs do the oppressive and monopolistic things that Comcast does. Most ISPs now offer unlimited data in all of their non-business packages. Most ISPs provide direct connections to content providers at no cost, because they benefit just as much or more. Most ISPs do not have enough market share to leverage things like data caps and direct connections to rip off customers and compete unfairly with content providers. Most ISPs do not make anywhere near the profits Comcast does. Comcast is not doing any of this because it is necessary to remain profitable. It is doing all of this because it wants more money and it has the power to get it. If it acquires Time Warner, it will control even more of the internet. We should be seriously worried about one company having this kind of power over our largest communications system (especially when that company thinks that it can just redefine language to avoid looking bad). Comcast is already acting in ways that have been established as monopolistic and illegal in the US and most of the rest of the world. While we should be worried, it is the government's job to protect us from this. Not only should Comcast not be allowed to increase its monopoly by acquiring Time Warner, it should be the subject of a serious government investigation for monopolistic practices.
Here is the article on data caps definition: http://arstechnica.com/business/2014/08/comcast-tells-government-that-its-data-caps-arent-actually-data-caps/
* If some Comcast executive reads this and suddenly feels compelled to demand that I use a different term, let it be known that I will not. Bullying large publications might work, but I am not going to redefine language based on the delusions of grandeur of some company.
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