Every now and again, the internet (and government) erupts over the issue of net neutrality — which is complicated, but roughly speaking, it's the principle that all internet traffic and content should be treated the same way, with restrictions or discrimination — and threats to its existence. There are a lot of reasons net neutrality is fundamentally a good thing, but one of the emergent reasons is that internet service providers — both cable companies like Comcast and carriers like Verizon — are increasingly in the content business themselves, or closely partnering with people who are, presenting lotsa conflicts of interest when it comes to delivering all of the internet neutrally.
Comcast, most prominently, owns a 51 percent controlling stake of conglomerate NBC Universal and runs its Xfinity On Demand as a kind of competitor to other online video services like Netflix and Hulu. Netflix CEO Reed Hastings is not exactly a neutral (ha) party, but his bitter complaints on Facebook and in Netflix's earnings about Comcast's data illustrate the potential problem of the people who own the pipes also creating the stuff that gets shoveled down them:
"On the Xbox the Netflix app, the Hulu app, and the HBO GO app, are all subject to this cap. But Comcast has decided that its own Xfinity Xbox app is not subject to this 250 gigabyte cap. This is not neutral in any sense."
(Hastings essentially disputes the assertion that Xfinity only uses internal Comcast network resources, or doesn't care at any rate — and thinks Comcast's service and Netflix's should be treated the same, with "a level playing field for all Internet applications.")
Whether or not you believe that Comcast is correct in treating Netflix's video traffic differently than its own, it's hard to deny that it's at least going through the motions of creating a less-than-neutral internet, in which the content it has a stake in distributing is more privileged than anybody else's. So perhaps more disconcerting is that Comcast does appear to be tagging their content to be higher priority on the network, according to Dan Rayburn, with Xfinity content marked with a CS5 tag ("considered a high class of service"), while content from Hulu, MLB and Netflix are tagged CS1 ("low class of service and effectively gets any bandwidth left after every other service has transmitted over the link"). Comcast might not actually be acting on these QoS (quality of service) tags, but they are tagging the content, according to a company that's "looked at how packets are marked on their home broadband connections provided by Comcast," says Rayburn. Even if you think it's fair that Comcast counts Netflix against your data cap but not its own service, should Comcast be allowed to potentially make your Netflix or Hulu service worse than your Xfinity service?
Or to go full-tilt on potential, hypothetical badness, what if Comcast gave higher priority on its network to content produced by NBC Universal than stuff from other studios and networks, while also not counting it against your data cap? For example, Top Chef, made for NBC Universal's Bravo channel, gets enough guaranteed bandwidth to be streamed in HD over Xfinity, but if you want to watch No Reservations, produced for the Travel Channel, which is partly owned by Comcast rival Cox, you only get enough bandwidth to see it in standard def if you stream it through Netflix. And it counts against your data cap. This is the scary place where net neutrality advocates do not want things to go. This is, no doubt, a reason one of the one of the Justice Department's rules for the Comcast-NBC Universal merger is that Comcast has to give up its management rights in Hulu — the Justice Department thinks Comcast could "interfere with the management of Hulu, and, in particular, the development of products that compete with Comcast’s video service."
On the mobile end of things, carriers have traditionally had their own video services to sell you, like Verizon's Vcast — and unlike cable providers, even when the FCC was trying to mandate net neutrality, it never intended to apply the rules as strictly to mobile carriers as it did to cable companies. So T-Mobile is currently talking about "access to some content [that] wouldn't count against a customer's monthly data plan" — presumably that's content T-Mobile or a partner (who is paying T-Mobile money) is providing. For some customers, like the ones who nearly bust their data cap every month, that's a huge incentive to choose T-Mobile's video content over, say, YouTube's.
What strikes me as more potentially problematic is the kind of deal that zombie service Color has struck with Verizon (bless you Jenna Wortham, for not saying pivot): A new version of photo-turned-video-streaming thing Color is "optimized for Verizon's network." (People on Verizon get to record audio; people on AT&T do not.) Color founder Bill Ngyuen says, disturbingly, that "People used to decide whether to develop for Windows or Mac; then they had to decide between the iPhone and Android," but "now they have to decide which network to develop for."
If every service and every network goes down this road — oh sorry, you can only get Netflix on Time Warner; Instagram is only available for AT&T users; Facebook video is only on Sprint — how can that possibly be a good thing for anyone?