Cap Doesn't Fit for Sony TV Plans

4:55 PM -- Reed Hastings isn't the only one whining about Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s broadband capping policies these days. (See Netflix CEO Keeps Whining About Comcast.)

Sony's not too wild about them either, so much so that it's putting a proposed broadband TV service on the backburner while it waits for some guidance from the feds on Comcast's capping policy for its Xfinity TV app for the Xbox 360. For now, anything streamed to the console via that app doesn't count toward the MSO's monthly 250-gigabyte cap because, as Comcast argues, it's delivered via Comcast's managed IP network rather than the public Internet. (See Sony Seeks Slice of Pay-TV Market, Comcast's Xbox App Raises Net Neutrality Concerns and Comcast Won't Cap Xbox 360 Streaming .)

The policy is giving Sony pause. "These guys have the pipe and the bandwidth," Sony Entertainment Network VP and GM of Global Video and Music Michael Aragon said this week at a tech event hosted by Variety. "If they start capping things, it gets difficult."

Sony's grievances only toss more fuel on a fire that Netflix Inc. (Nasdaq: NFLX)'s CEO has been stoking lately, claiming that the policy violates network neutrality rules and stymies video competition. Hastings has a pretty good reason to be concerned. Comcast launched a subscription-based streaming service called Streampix that’s viewed as a potential Netflix competitor. Pressure groups like Free Press are also calling on the Federal Communications Commission (FCC) to conduct a probe on capping policies and determine whether they really help ISPs manage their networks and keep them unclogged. (See Comcast Goes OTT to Target Netflix, Hulu Plus .)

Sony, meanwhile, has had limited success trying to enter the U.S. pay industry by making cable set-tops, so a broadband-fed, over-the-top approach involving the PlayStation 3 might make more sense. But its hopes and dreams had best not be hitched to this virtual MSO idea if it's truly intent on waiting for the FCC to act on something. Sony may end up cooling its heels for much longer than it wants to.

And it may not win, anyway. Sanford C. Bernstein & Co. Inc. analyst Carlos Kirjner gives the network neutrality card being played a small chance of working. In a recent note to investors, he points out that the FCC's Open Internet Order "explicitly and unambiguously endorses usage based pricing," adding that Comcast's Xfinity TV app for the Xbox is the kind of exception covered by the Order.

Plus, the timing for such a challenge is horrible. The FCC's already fought that battle and won't be back for more until after it solves its more pressing spectrum issue.

If Sony has any real desires of becoming a virtual MSO anytime soon, it might be better served getting it off the ground now and taking its chances. It can keep its powder dry for a battle that likely won't be fought for years down the road.

— Jeff Baumgartner, Site Editor, Light Reading Cable

Interested in learning more on this subject? We’ll be covering it at our live event: Managing & Monetizing OTT Video – June 21, 2012. Registration details are here.

craigleddy 12/5/2012 | 5:34:17 PM
re: Cap Doesn't Fit for Sony TV Plans

So Sony's Internet TV service was destined to be a rousing success if not for Comcast's 250 GB cap?? I'm not buying it and they shouldn't be selling it. 

Jeff Baumgartner 12/5/2012 | 5:34:17 PM
re: Cap Doesn't Fit for Sony TV Plans <div>

It depends on what kind of service they had in mind. If it's envisioned as a true TV service replacement, I start to think about how often TVs get left on when no one's watching them and how quickly that will eat through a cap, especially if it's in HD.&nbsp; you have to watch a lot of netflix to get near a 250GB cap, but if you're using broadband for all your video needs, including live TV, I'd like to see the consumption model on something like that for an average user. JB&nbsp;&nbsp;

paolo.franzoi 12/5/2012 | 5:34:16 PM
re: Cap Doesn't Fit for Sony TV Plans


So, if the difference is the public Internet versus the private network but both use the same access bandwidth then the bandwidth bottleneck is NOT the access.

And Jeff, depends on how much true HD you are watching.



DCITDave 12/5/2012 | 5:34:13 PM
re: Cap Doesn't Fit for Sony TV Plans

I'd like to see Sony produce an online service of any time that consumers care about and then we can discuss what ISPs are doing to block/twart it. Seems convenient to complain about something that doesn't exist and that your company has no track record of producing.

paolo.franzoi 12/5/2012 | 5:34:12 PM
re: Cap Doesn't Fit for Sony TV Plans

Playstation Online?

Oh snap! &nbsp;The hackers seemed to care. :)



Cooper10 12/5/2012 | 5:34:09 PM
re: Cap Doesn't Fit for Sony TV Plans

One wonders exactly what Netflix, Sony, and others are advocating.&nbsp; If a usage cap isn't acceptable, is metered usage a better alternative?&nbsp; Network management by quality of service?&nbsp; If usage remains unlimited, then price will go up - simple supply and demand.&nbsp; If metered usage is implemented, then price goes up, initially for the heaviest users, but eventually for the majority.&nbsp; If QoS is implemented, then consumer pricing may not be impacted (at least for ISP service), but consumers would presumably pay more for the services that are paying for QoS, so, again, price goes up.

With bandwidth consumption following something close to Moore's Law, investment must be made to keep up with demand.&nbsp; The "public interest" groups seem to want to suspend basic laws of supply and demand on broadband pricing

paolo.franzoi 12/5/2012 | 5:34:01 PM
re: Cap Doesn't Fit for Sony TV Plans


I guess I am confused by your comment. &nbsp;Every scenario you put down is "and the price goes up".

The question about caps is separate. &nbsp;If you pay (like I do) for a 20Mb/s downstream line, why is my bandwidth cap not 20 Mb/s * 60 secs/min * 60 mins/hour * 24 hours/day * 30 days/month or....about 6.5 TBytes/month?

Did I not already pay for this? &nbsp;If I didn't, then what did I really pay for? &nbsp;Why is it not spelled out to me when I bought the service? &nbsp;

There are 3 irrational pieces of the argument and many rational pieces. &nbsp;I will leave you and others to bring up the rational pieces:

1 - Upstream: &nbsp;The bandwidth caps as I know them are all about downstream bandwidth. &nbsp;No mention of upstream is there.

2 - Access vs the rest of the network: &nbsp;If cable IP based OTT video shares the same Access and Metro networks as the 3rd party OTT video then exactly at what point is the pressure on the network?

3 - QoE: &nbsp;If they are improving my QoE, then I have not noticed it. &nbsp;The normal claim is that people are hogging the network. &nbsp;Well, why not off peak usage (like Weekend minutes on Cell phones)? &nbsp;If nobody else is using the network, what difference does it make if I am streaming 1 Gb/s to me. &nbsp;What is NOT clear is that anybody using the network at its cap actually makes a difference to other users.



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