Originally posted on Gigaom:
Comcast (s cscma) said Monday that the content streamed over Microsoft’s (s msft) Xbox won’t count against user’s 250 gigabyte monthly usage cap prompting outrage among cap-hating websites and consumer groups. But the reality of the situation is that Comcast is within its rights. While we can lament the FCC’s failure to implement network neutrality rules that didn’t give Comcast a legal loophole, the regulations don’t ban such behavior directly.
The technical realities.
Comcast says streaming its video on demand service via the Xbox won’t count against its monthly caps because the traffic doesn’t go over the public Internet. And that’s true. Because Microsoft has ceded a lot of control to Comcast in order to get the authentication and other technical pieces it needed to make the Comcast Xfinity service available through its console, the traffic routed through the Xbox is fully managed by Comcast. It comes directly from Comcast’s private IP network to the authentication hardware inside the console and then is played on the TV.