Cable chief: Antitrust allegations 'flatly wrong'

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Bloomberg reported on Monday that the Justice Department is also requesting information from satellite television providers DirecTV and Dish Network.

But Powell, a former chairman of the Federal Communications Commission, said critics of the cable industry have "radically exaggerated" the problem. He argued that cable companies want to see their customers consume more content on the Internet, noting that Internet service is a more profitable business than cable television for most companies.

"Why would you want to frustrate consumers?" Powell asked at a briefing for reporters.

Consumer groups have criticized cable companies for limiting the amount of data customers can consume, and the government is reportedly probing whether the data caps are intended to discourage people from solely watching video online.

But Powell said 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 one 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, who also worked in the Justice Department's Antitrust Division, said he believes the investigation is routine.

"The division frequently examines industries and explores questions, particularly in a dynamic space when there are new entrants," he said.

He said it would be "very surprising" if the investigation actually leads to an antitrust case.

But Powell noted that the companies, and not his trade association, are participating in the probe.

He questioned the motives of the people who leaked the details of the investigation to the media. Powell said whoever leaked the information must have a "very compelling" reason to see the probe publicized.

Powell is scheduled to testify on Wednesday at a hearing of the House Energy and Commerce subcommittee on Communications and Technology to examine the future of video.