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As Time Warner Cable and Intel clash, US Justice Department investigates

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Time Warner Cable logo (1020)
Time Warner Cable logo (1020)

The US Justice Department is investigating the ongoing clash between budding internet television providers and traditional cable giants, reports The New York Times. The Department's interest comes as part of a broader look into the practices of cable and satellite television providers, some of which have been doing their best to stymie the efforts of internet upstarts. Reportedly, contracts made between cable companies and content providers sometimes include clauses that explicitly prohibit sales to internet streaming services. Less aggressive contracts may simply discourage such sales through financial penalties or incentives.

Eyes are on Time Warner Cable

The NYT says that fingers are pointed toward Time Warner Cable. TWC is the second largest cable provider, and the first largest, Comcast, just happens to be legally prohibited from making deals that would block streaming services. TWC also hasn't been shy about protecting its hold on content. Yesterday, TWC said it was "absurd" to suggest that it shouldn't be allowed to make exclusivity deals, which can prevent internet TV services from gaining access to shows and events. Such deals may only prevent internet startups from accessing a select few channels, but it's having access to exactly what viewers want — live sports, HBO, their one favorite show — that can make or break a new service's chances in the market.

Reports have suggested that Intel — which is working to launch an internet TV platform by the end of the year — has been the butt of these deals lately. Intel has reportedly had to pay significantly more than traditional cable providers to gain access to identical content. The NYT suggests that Intel won't consider introducing the new service until it can make deals to offer a sizable selection of what's out there. For now, Intel's only option may be paying big to make it happen.