Comcast data caps stand in the way of Sony video service

Sony (s sne) has big plans for a competitive home video service to compete with programming offers from the cable and satellite companies – or maybe I should say ‘had.’ Speaking at a Variety conference on Monday, Sony SVP and GM Michael Aragon said those plans are on hold until regulators determine whether Comcast (s cmsca) can keep prioritizing its own Internet video traffic over others’, Ars Technica reported.

“These guys have the pipe and the bandwidth,” Ars Technica reported Aragon as saying. “If they start capping things, it gets difficult.”

At issue isn’t just the 250 GB monthly cap that Comcast has imposed on its residential broadband customers, but the fact that it’s making exceptions to that cap. Content streamed to Comcast’s Xfinity app in the Xbox is off the meter, while content coming from other providers is counted against that monthly allotment. While Netflix (s nflx), Sony and other over-the-top video providers aren’t happy with the situation, my colleague Stacey Higginbotham writes that Comcast may be well within its rights, since it’s using its own infrastructure to deliver the Xfinity service and can therefore treat it as a special case.

However, as my colleague Daniel Frankel at paidContent proposes, Comcast may be biting the hand that feeds it. Providing broadband services, which in turn bring third-party content into the home, is turning out to be a much better business model for cable operators than providing that content on their own. Cable providers are losing video customers and finding their programming margins squeezed, but those same customers remain willing to pay big bucks for raw broadband access.

Picture courtesy of Flickr user brizzlebornandbred.