Report: The Feds Are Investigating Cable Companies Over Data Caps

The Wall Street Journal reports that the Justice Department is looking into whether the country's huge cable companies are using data caps on their internet services to keep streaming video upstarts from taking hold. Is anti-trust action against the giants imminent?

In particular, the WSJ says that DoJ officials have spoken to both independent video-on-demand services like Hulu and Netflix as well as to cable companies like Comcast and Time Warner. The streaming video services complain that data caps are being unfairly used by the big companies to prop up their cable businesses. Indeed, when Comcast said that its competitor service, Xfinity, would be exempt from data caps, Netflix CEO Reed Hastings (rightly) went on a tirade about net neutrality. Cable companies, on the other hand, argue that they need to cap data to keep excessive bandwidth from bogging down their networks.

There have been rumors that several federal agencies had taken an interest in data caps, but this is the most concrete report we've heard to date. While the WSJ doesn't name its sources, the investigation makes sense given that data caps are definitely being used in sketchy ways. It's impossible to know for sure what's going on right now, but for the sake of your Netflix queue, let's hope the report is true. [WSJ]

Image via INCH