OVERNIGHT TECH: DOJ probe looms over House video hearing

The Lead: Allegations that cable companies are trying to stifle competition from online video are likely to be a central issue in Wednesday's House hearing on the future of video.

The Justice Department's Antitrust Division has reportedly launched an investigation into the cable industry's business practices. 

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Cable companies like Time Warner and Comcast provide both television and broadband Internet service for many customers. The question is whether the companies have illegally used their control over Internet access to discourage people from dumping their television service in favor of online video providers, such as Netflix and Hulu.

At the hearing of the House Energy and Commerce subcommittee on Communications and Technology, Rep. Anna Eshoo (D-Calif.) is expected to question whether cable companies are using data caps to prevent people from consuming too much online video.


"I’m concerned about the potential impact of data caps on the growth of the streaming video market," Eshoo will say, according to her prepared remarks.

But Michael Powell, president of the National Cable & Telecommunications Association (NCTA), told reporters on Tuesday that the caps are a way to ensure that the heaviest data users pay their fair share. He said the issue is not dividing up a limited resource, but ensuring that the top users pay more for the expensive Internet infrastructure they are using.

He compared data caps to the Occupy Wall Street movement's calls for the richest 1 percent of Americans to pay more in taxes.

"One percent of heavy broadband users probably cause 42 percent or more of the consumption of the network," Powell said. 

Powell will defend the interests of the pay-television industry at Wednesday's hearing, along with Charlie Ergen, chairman of Dish Network.

David Barrett, president of Hearst Television, will advocate for the broadcasters. Michael O'Leary, the vice president for global policy for the Motion Picture Association of America, will represent the content producers.

Advocates for online technology will include David Hyman, general counsel for Netflix, and Jim Funk, a vice president for Roku, which makes devices that allow consumers to play Internet videos on their televisions.

Gigi Sohn, president of Public Knowledge, will advocate for consumers, and Robert Johnson, CEO of Sky Angel, will discuss the interests of religious programming providers.

Chamber backs Dish bid for cell network: The U.S. Chamber of Commerce sent a letter to the Federal Communications Commission (FCC) on Tuesday in support of Dish Network, which is trying to get authorization to launch a mobile broadband network using spectrum currently assigned for satellite use.

The influential business group said Dish's plan would create jobs and help alleviate the "spectrum crunch" caused by the increasing demand for wireless data.

The Chamber urged the commission to adopt an "expedited process" to re-designate the spectrum band by the third quarter of 2012.

Authors slam e-book settlement: The Authors Guild warned a federal court that the Justice Department's planned settlement with three publishers will allow Amazon to regain dominance of the e-book market.

The Justice Department has accused the publishers and Apple of engaging in price-fixing e-books.

But in a court filing, the author's guild argued that the new pricing model was the only way to compete with Amazon.

"The proposal, by allowing targeted predatory pricing of e-books, would give governmental sanction to a practice long considered destructive to a free and fair market. It was precisely this practice — selling frontlist e-books at below cost to discourage and destroy competition — that helped Amazon capture a commanding 90% of the U.S. e-book market," the guild wrote. "Agency pricing, which the Justice Department believes was introduced through collusion, has allowed Amazon’s competitors to gain a foothold, driving Amazon’s market share down to 60% in two years."

The guild filed the letter as part of a public comment period on the proposed settlement. The Justice Department is expected to reply after all of the comments have been filed.

VA senate candidates to talk tech: George Allen, the Republican candidate for Senate in Virginia, and Tim Kaine, his Democratic opponent, will participate in a town-hall discussion about technology issues on Wednesday in Reston, Va.

The event is co-sponsored by Microsoft and the Northern Virginia Technology Council and will take place at Microsoft's offices. The candidates will speak separately and will answer questions from a panel of business leaders.

Online fundraising tool gets $7.9M: Rally.org, a San Francisco start-up, said Tuesday that it raised $7.9 million in venture capital funding. The group offers social media tools to help political campaigns and advocacy groups raise money.


IN CASE YOU MISSED IT:

FBI arrests dozens in credit card fraud sting

FTC sues Wyndham Hotels over data breaches

Study: Most cellphone users go online with their phone


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