It is perhaps not a surprise that the Department of Justice is investigating whether there are antitrust implications to cable TV operator retail packaging policies, as they might pertain to restraint of trade. Those questions are bound to emerge.
When a single network is used to deliver services that are regulated under different frameworks, it is virtually certain that conflict will emerge, at some point, about the proper regulatory framework to be applied. A cable TV or telco now provides Internet, subscription video and voice services, all of which are governed by distinct legacy regulatory approaches.
Basically, data services are least regulated, video regulation a mix of broadcast TV rules and local franchising, while voice traditionally is the most highly regulated. But all three services now are delivered over a single network, where in the past three distinct networks were used.
That is bound to raise questions, even if it should not.
Lots of people might ask whether a cable operator can create an extension of a video subscription service that includes some of the content a customer already has paid for, and make it available on other screens, then exempt the Internet usage from the consumer’s bandwidth cap. Some might say it is obvious a retailer can do so. Others would say it stifles rival streaming services.
Some might ask whether it should be lawful for a service provider to require a “sell through” purchase at all, where cable TV service has to be purchased before some or all of that content can be purchased for Internet delivery. Again, some would say this is done for all manner of products, all the time, and that it is not, in and of itself, restraint of trade.
Some might even argue that it is not the distributor policies, but the content owner policies that create the restraint of trade issues, since no matter what distributors might prefer to do, content owners generally will not allow licensing of their content on terms and conditions equivalent to those offered to current distributors.
Though no dominant distributor might prefer new competition, direct Internet distribution of popular network content, if licensed on non-discriminatory terms, would be an incentive for existing and new contestants alike.
Still, the Department of Justice probe illustrates the “rule” that any application provider, in any market, will eventually come under scrutiny if it becomes too big, and plausibly can be viewed as “stifling” competition by tying the purchase of new products to existing products.
If you recall, that was precisely what happened to Microsoft. It was barred from bundling its browser with its operating system. At least in part, that is what DoJ is looking at with sell-through requirements.
