Comcast, Xbox 360 and Public Knowledge’s Puny View of Innovation

by Mike Wendy on March 28, 2012

You may know that Comcast recently announced a new service package that would stream Comcast (Xfinity) movies to Xbox 360 customers, with that relationship sitting outside of the data caps imposed by the carrier.

Notes Carl Bode:

The lynch pin of Comcast’s argument is that the Xbox 360 is little more than another set top box — it just happens to utilize IP video delivery. “The Xfinity On Demand content that we will deliver to Xbox 360 will not travel over the public Internet and is delivered in much the same way as we deliver your video service to your set top box,” says the cable giant. “Your Xbox 360 essentially acts as an additional cable box for your existing cable service via the Xbox 360. As a result, our data usage thresholds do not apply.”

Stated differently, this new service offering does not run afoul of the FCC’s Net Neutrality regulations.

Of course, the offering has anti-private property group, Public Knowledge, greatly upset, exclaiming in a press release:

This type of arrangement is exactly the type of situation the Federal Communications Commission’s (FCC) rules on the Open Internet were designed to prevent — that an Internet Service Provider juggles the rules to give itself an advantage over a competitor.

PK wants the Open Internet rules to be ever-more engorged so that network providers can’t do more than simply turn on their networks and silently serve the public interest.  That’s right – indentured servants.

Free Press seems more sanguine about l’affaire Xbox, stating:

…Unfortunately, such anti-competitive tricks may be allowed by loopholes in the FCC’s Open Internet rules, proving once again that the FCC failed to deliver on the promise of real Net Neutrality.

What’s the takeaway here?  Well, it’s about “loopholes.”

Like water running to the cracks, companies seeking every legal competitive advantage they can take will do so.  Thankfully.  In this instance, it looks like Comcast has figured out how to serve consumers with good offerings, while staying out of the regulators’ cross-hairs.  If this is “taking advantage” of loopholes, then, fine, I’m all for it.

I don’t like (or believe in) the FCC’s Net Neutrality proscriptions, but certainly those rules weren’t intended to ossify or neuter companies like Comcast?

Or were they?

If Public Knowledge had its way, network providers would simply shut up, surrender their property, and clear the way out for the real innovators to innovate; if you’re in the unfortunate position of being a network provider, seeking advantage over competitors is verboten.  Clearly, Public Knowledge sees innovation in static, anti-network provider terms (after all – how can “dumb” networks be “smart”?), viewing it as limited primarily to technology, and to business models at the edge of the Internet (like their corporate supporters, Google).  Networks need not apply.

C’Mon.  That view is dumb in so many ways a supercomputer couldn’t even tally the calculation.

The other takeaway is this – once a rule has been created, the special interests that created it are equally as crafty at finding the loopholes to distort the initial rule beyond reckoning.  Because consumers must be protected, you know.

Sadly, with each new complaint, caterwauling for the tightening of the regulatory thumb screws, the only thing consumers get is, er, screwed.

What a racket, those special interests.  What a small view of innovation and progress.




txpatriot March 29, 2012 at 1:22 am

I wouldn’t call it a loophole. The FCC’s Net Neutrality Order specifically allows for “special services” or private networks that don’t use the public Internet. If Comcast’s Xbox service is a “special service” than it fully complies with the NN Order.

Mike Wendy March 29, 2012 at 3:29 am

I agree. PK uses the phrase, and I just go with it.

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