Regulators have expressed concern about the lack of competition in the broadband market. Last year, the Justice Department noted that 70% of all homes in the U.S. have access to only one or no broadband provider that meets the FCC’s definition of high-speed service.
Sling TV executives say many former customers tell the company they dropped the $20-a-month streaming service because they were being charged so much in extra broadband fees that it was cheaper to simply go back to cable TV. The over-the-top service—meaning it is delivered over the Internet—offers a slim bundle of pay-TV channels, such as AMC and CNN.
Broadband companies’ “incentive is to sabotage over-the-top services, and data caps is a primary tool in order to accomplish that,” says Jeff Blum, deputy general counsel at Dish Network Corp., which owns Sling TV. “It’s competing with their bundle.”
Comcast denies its data caps are targeted at stifling online video rivals. “We everyday contribute to the use and the growth of the Internet,” Mr. Jenckes says. “There is absolutely no anticompetitive belief or objective.”
Sling TV Chief Executive Roger Lynch estimates that if a household watched 5½ hours of high-definition streaming a day—the average time American adults spend watching TV today—it would consume about 375 gigabytes a month. That is without counting other Internet use like Facebook or email, he notes.
Some companies like Netflix and Sling TV have options that let people lower the quality of streams to conserve data. But many are pushing for higher quality video, which gobbles up data faster. The Masters golf tournament, for example, streamed the famous “Amen Corner” in ultrahigh definition to Sony and Samsung smart TVs this year.
“The expectation for over the top has changed,” says John Bishop, an executive at Akamai Technologies Inc. who works with media companies to help them distribute their video across the broader Internet. “In many cases, people are expecting it to be better than television.”
For sports like the NCAA basketball tournament in March, which Akamai helped stream, “you could actually make out individual beads of sweat on the players,” Mr. Bishop says. Akamai is working with clients to make their video delivery more efficient, he says.
