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Reed Hastings Cries Foul on Comcast

16 Apr, 2012 By: Erik Gruenwedel

Reed Hastings

Reed Hastings apparently spent the weekend screaming at his television.

The Netflix co-founder and CEO on his Facebook page said he spent the weekend watching repurposed programming from the Internet via Netflix, HBO Go, Xfinity and Hulu apps on his Xbox 360.

Hastings, like millions of people, gets his Internet through Comcast, the nation’s largest cable operator — and burgeoning subscription video-on-demand competitor to Netflix. The CEO noticed that when streaming content via Netflix, HBO Go and Hulu apps, the usage is applied against his monthly data cap allowed by Comcast. That apparently does not hold true for the Xfinity app.

Specifically, the CEO said he watched “Saturday Night Live” on April 15 via the Hulu app, which ate up about 1 gigabyte of his monthly data cap allowance. He said watching the same program via Xfinity didn’t use up any of his cap limit.

“The same device, the same IP address, the same Wi-Fi, the same Internet connection, but totally different cap treatment,” Hasting wrote on his Facebook page. “In what way is this neutral?”

It should be noted that Comcast allows subscribers upwards of 250GB data usage per month, which is more than enough for the average user.
Comcast earlier this year bowed Xfinity TV Streampix, a standalone SVOD platform designed to give monthly cable subs unlimited streaming access to content with their cable subscription or a $10 monthly surcharge for non-subs.

Comcast says the reason it doesn’t tap subscribers’ data usage caps for Xfinity TV access is due to the fact the content is stored on its servers compared to Netflix, HBO Go and Hulu Plus, which store their content on separate servers.

The cable operator believes it can bypass net neutrality guidelines by virtue of being classified a “specialized” or “managed service,” which provide end users (subscribers) valued services, supplementing the benefits of the open Internet,” according to BTIG Research analyst Richard Greenfield.

Hastings has called Streampix a significant competitor to over-the-top services such as Netflix due to Comcast’s infrastructure, cable prowess and the fact that it owns content creator NBC Universal.

Comcast, as part of its agreement with federal regulators approving its $30 billion acquisition of NBC Universal, had agreed to abide by net neutrality principles that disallow it to impose unfair restrictions on competitors using the same broadband connection into consumers’ homes.

In addition, Comcast agreed to remove itself from operating Hulu, which it co-owns with The Walt Disney Co. and News Corp.

“To the extent Comcast is delivering the content without ever touching the public Internet, we have a tough time viewing what they are doing as wrong, albeit we recognize the long-term competitive threats it creates for companies such as Netflix,” Greenfield wrote in an April 16 post. “We believe TV innovation is critical and believe “specialized services” create a path to robust innovation such as an Apple TV that utilizes a Comcast video.”

A Comcast representative was not immediately available for comment.

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