Comcast Chief Executive Officer Brian Roberts speaks at his keynote address at the Consumer Electronics Show in Las Vegas, Nevada in this Jan. 8, 2008 file photo. (Rick Wilking/Reuters)

The controversy surrounds Comcast’s launch last March of its Xfinity video streaming service over Microsoft’s XBox. The streaming service won’t count against consumers’ 250 gigabyte monthly data cap, which has sparked the ire of Netflix CEO Reed Hastings and public interest groups who say the practice gives unfair preference to its own service over competitors.

It’s unclear if the service is a violation of net neutrality rules since it doesn’t appear that videos streamed on the Xfinity service travel over the public Internet. The Federal Communications Commission granted approval to Comcast’s joint venture with NBC Universal in late 2010 with the condition that the company abide by “net neutrality” rules that would prohibit any favoritism of some content over others.

“When the Obama administration signed off on Comcast’s merger with NBC Universal, it laid out a set of rules to prevent Comcast from squashing its competitors — including popular cable alternatives — and hurting consumers who have seen rapidly rising cable rates over the last several years,” Franken said in a statement.

He called for the FCC and the Justice Department to investigate the allegations and impose “significant penalties” if violations are found.

Comcast refuted allegations it broke promises on net neutrality. It said that its On Demand service, which is being used for its XBox streaming video service, is subject to cable, not Internet rules.

“When Comcast streams its own services over the open Internet (including or, such streaming is subject to Comcast’s broadband Internet data usage standards,” Comcast spokeswoman Sena Fitzmaurice said in an e-mailed statement. “But the Xfinity app for the X-Box does not stream content over the open Internet and is also part of our Title VI cable service. As such, it is not subject to the FCC’s open internet rules.”

The FCC and Justice Department declined to comment on whether they would take up reviews of the matter.

“The Commission takes seriously its strong and fair merger conditions that protect competition and consumers,” said FCC spokesman Neil Grace.

Bandwidth constraints on wireline and wireless networks have become a flashpoint for policy battles between carriers and tech firms, who are trying to get as much attention to their services from consumers faced with potentially higher bills. Carriers, meanwhile, argue they need to impose caps because of the gluttonous appetite of consumers for Internet data.

Netflix’s Hastings wrote on a Facebook post last March that Comcast’s practices on the XBox appeared to harm competition. Netflix users are among the biggest data consumers in peak hours on wireline networks.

“Comcast (is) no longer following net neutrality principles,” he wrote. “Comcast should apply caps equally, or not at all.”


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