Streaming TV Services Look to Bypass Internet Congestion

While the FCC has proposed that broadband companies cannot accept payments for access to an Internet fast lane, some streaming TV services want to be classified as “managed services,” much like digital phone services. This gray area of the net neutrality rules may provide media companies a fast lane opportunity. The FCC allows cable and phone companies to operate managed services, such as digital phone services or video-on-demand, on a special bandwidth so that consumers do not experience dropped calls or video buffering.

videostreamIf a cable company decided to classify streaming services as managed services, they would have to be able to offer the same type of special deal to all streaming services, so that no one company gets special access. However, the FCC could still wield its regulatory power if it believes that companies are trying to “evade the open Internet rules.”

Roger Lynch, CEO of Sling TV, told The Wall Street Journal that a managed service arrangement with cable providers was bad for consumers because smaller cable companies can’t make such deals and won’t be able to compete. “It makes a mockery of net neutrality,” he said.

Media companies are arguing that the general Internet bandwidth won’t be able to handle the traffic from customers trying to access their streaming services. With a managed-services arrangement, cable companies could guarantee customers that there would not be any frustrating buffering. Cable companies would also be able to bundle online TV services with broadband plans so that the cable companies do not lose out on revenue from cord cutters.

As a managed service, streaming movies and television shows would not count towards cable customers’ monthly data cap. Right now, Comcast is testing a 300 gigabyte per month plan, which means customers would have to watch almost 240 hours of HD streaming video to reach the limit. Industry experts say that sounds like a lot, but families who stream different content simultaneously could go through 300 gigabytes quickly.