Huge! The Wall Street Journal reports that the Justice Department has opened an antitrust investigation of the cable industry. At issue are caps on internet data consumed by cable customers and policies that may be inhibiting experimentation with a la carte pricing for cable channels.
Update: Research analyst Craig Moffett has a smart interpretation of the investigation, which Peter Kafka has helpfully summarized. Essentially, Moffett thinks that Justice’s skepticism of data caps will accelerate the move toward usage-based pricing. (As I wrote about last month, that trend isn’t great for cord cutters and other data hogs.) On the issue of channel bundling, Moffett doesn’t think there’s much to get excited about:
The reasons we have the unwieldy content bundles that we have today are not because Comcast or DirecTV won’t sell us individual channels, it’s because Disney and Viacom won’t sell them individual channels. We see little or no chance that the DOJ (or the FCC) will take on that issue. The Supreme Court has already made it clear that that is a losing battle.
I’m not as convinced this is a non-issue. Two federal agencies are now examining the question from opposite ends: Justice wants to know if the cable companies are preventing experimentation with pricing models by insisting on “most-favored nation” status with programmers while the FCC simultaneously considers whether to redefine what it means to be a cable company (or, in regulation-speak, a “multichannel video programming distributor”). The latter process could end up forcing companies like Disney and Viacom to sell their content to over-the-top platforms like, say, YouTube, which would be far more likely to experiment with a la carte offerings, especially if Justice helps make the rates for that content more appealing.
I want to write about this issue at greater length, so this is just a quick, unformed idea, which I’m sure is flawed. But while everyone focuses on the data-cap question, I think the more interesting, potentially more disruptive question raised by this antitrust investigation lies in the age-old cable model of bundling channels.