The discussion about “cutting the cord” — going without a cable television subscription and making do with Hulu, Netflix and the like — partially stems from the fact that paying for television involves paying for a lot of content audiences don’t want or need. This represents a rather tricky bit of business for cable providers: The same companies that offer television channels also sell Internet access. They know that a customer who can watch everything online has no need to pay for a bundle of channels. This represents a pretty clear conflict of interests.
So now the government is taking a look at this: The Justice Department is investigating cable companies to see if they are “acting improperly” in an effort to limit (at least for now) competition from online video sources, according to the Wall Street Journal. Investigators are particularly interested in data caps and the fact that certain online programming is only available to people who have paid for a cable subscription.
It’s pretty clear that cable companies — for the moment, at least — have a clear financial incentive to keep customers from canceling their subscriptions and flocking to online video. There is no other reason to, say, require someone to already be a cable subscriber in order to view something online. Cable companies obviously want to keep customers reliant on the old system of television viewership, and online viewing is a direct threat to that. I cannot say whether or not this is anticompetitive, which is why I do not conduct antitrust investigations.