U.S. Probes Cable for Limits on Net Video
WASHINGTON—The Justice Department is conducting a wide-ranging antitrust investigation into whether cable companies are acting improperly to quash nascent competition from online video, according to people familiar with the matter.
Context & Ripple Effects
The reported Justice Department inquiry extends a policy arc that began with public-interest groups seeking an antitrust review of TV Everywhere in 2010 and continued with a 2011 federal look at web-video rivalry. The recurring focus is whether incumbent TV-distribution arrangements can constrain emerging Internet delivery.
The report places cable companies’ conduct toward online video in a broader competition frame rather than treating it solely as a programming or technology dispute.
First-order effects
- The reported inquiry puts cable companies’ treatment of online-video competitors under Justice Department antitrust scrutiny.
- Online-video providers gain a federal forum for claims that cable-industry practices may be limiting their ability to compete.
Second-order effects
- Cable operators must weigh the antitrust exposure of video-distribution practices against the value of protecting established television businesses.
- The inquiry increases pressure on TV Everywhere-style arrangements to show that they do not exclude Internet-based video rivals.
Third-order effects
- Repeated federal attention points toward Internet-video access becoming a durable antitrust issue in the transition from managed TV distribution to online delivery.
The trend: The shift of video viewing toward the Internet is turning control over distribution and programming access into a central competition-policy question.