The OP really doesn't sound that suspicious really, not really worth the title. If a service provider serves popular content locally via their own client to reduce the hit on their external links what's the problem? Is there some commercial advantage they're gaining from it other than not having that bandwidth eaten up?
Maybe I look at it differently being from a country that has always had caps, where the introduction of peering agreements and ISP hosted content meant you got more value (all downloads being 'paid for' to some of that now being 'free'). I suppose if you look at it from the perspective of going from a culture of unlimited data to capped downloads (all downloads being 'free' to most being 'paid for' and some free as it was before).
It's not like they are artificially prioritizing their own content.
Edit: On reading some of the other comments it sounds like it isn't just the same content via different clients, it's actually buying the same content off Comcast? Is this the case? The OP wasn't exactly a wealth of detail.
Where it gets icky is when Hulu suddenly doesn't count against the cap, but Netflix does, and the deal Hulu got isn't available to Netflix.
The real danger to the open internet will come when wireless carriers get in on this action. Since nearly all wireless data plans offer tiny amounts of bandwidth as compared to wired broadband, there's a much greater incentive for users to use services that won't count against their caps...
And that's what's going on here: the bits are cheaper when they don't count against a quota, so Comcast's service is inherently discriminatory.
The Internet still is, ultimately, a collection of networks, not a monolithic thing. There's no Comcast "in" the Internet and another Comcast "out" of the Internet. It really is cheaper for Comcast to move bits in their own network, and this really unpacks to a demand for Comcast to extra specially mark up their own bits for customers, charge far more than they really have to, not a deal for the customers.
Given that, I wouldn't be surprised Comcast ends up rolling right over on this if the fuss gets loud enough. "You really think everyone should pay more for those bits? Well... if you insist...."
I think there are viable counterarguments (simonster's is probably the best), but let's be clear on exactly what those counterarguments are counterarguing and ground them in reality, not on a mythical view of the Internet.
One could point out that a CMTS probably costs more than an edge QAM, but nobody wants to understand that.
Comcast has CDNs on their networks & their own customers can connect with each other, yet those activities will still count against a customer's cap. What makes Streampix different? Maybe there is a good reason, but I don't think Comcast wants to answer or divulge the true costs of bits flowing over it's network.
Comcast playing fair & people getting a better idea on how the caps affect their usage I think are good things. Comcast basically wants people to live in fear of hitting their cap if they use a competitor but don't want to stress it's own customer's over a problem they created.
They can and do in some cases. Most Motorola set tops made in the last 5-7 years have a built-in cable modem. It can be used for streaming IP VOD, multicast video, and most often used for the set top to transmit data (ie VOD control) back to your cable provider. It's not all that commonly used but it definitely blurs the lines. Simply transporting traffic via DOCSIS doesn't make it Internet traffic. For example Comcast's digital voice service has never counted against caps either.
CDV is an interesting thing & is blurring the lines somewhat. However, I think the fact that they require internally separate proprietary hardware that accesses their private VOIP network w/ QoS to avoid interfering with the customer's HSI, makes it less shifty vs Streampix which explicitly uses the customer's HSI because it must if it's to work on a phone or Xbox.
I think it's technically impossible for Comcast to get video to the Xbox w/o using the IP connection provided by the customer's HSI service. I would say, so long as it's using the same IP the customer would use to get on the Internet with, that it is using HSI and should be subject to whatever limitations they place on HSI.
Can you support Comcast making these claims? The last mile has always been the primary point of congestion on their internet pipes its been this way since @home started doing cable based internet. This justification would be a really tough sell.
I'd have to think that they'd be much more likely to claim its the same TV content and it shouldn't matter if its coming over the IP vs Broadcast network its all pretty much the same infrastructure.
I don't necessarily endorse Stop the Cap's analysis, but they have links to the relevant primary sources.
Also, I'm not sure that Akamai is serving everything from inside other ISPs; I know that was their original model, but things may have changed in 15 years.
IIRC, Level 3 wanted to simply push more traffic through their existing peering ports. Would that have Comcast more? No, it wouldn't have, AFAIK.
CDN services need to be priced at $2.
Netflix used to use Akamai; Netflix paid Akamai $3, Akamai paid Comcast $1, and everyone was happy.
Netflix now moved to Level 3, who they pay $1, and Level 3 demand $1 from Comcast (because L3 makes a loss if they don't charge $2). Netflix saved $2, so is happy. Comcast is unhappy, because they're out that same $2.
So now Comcast is crying foul and looking at ways to recoup that $2. Netflix is engaging in a PR battle, but really caused all this by switching from Akamai to Level 3.
Is that accurate?
What?
The closest I've heard is that Level 3 wants Comcast to charge $0 under their pre-existing peering agreement.
Comcast claimed Netflix's traffic isn't covered by the agreement and asked for extra fees. Level 3 complied (under protest).
This new thing Reed Hastings is talking about is different from that issue. AFAIK.
I feel that Netflix is trying to rally the net-neutrality army to come to its aid, but may not be an entirely neutral player here.
None of this is really secret insider information -- you can get it all by Wiresharking your connection, if you have Netflix.
Price has nothing to do with it actually. The client downloads a small file from all the CDNs, and then picks the one with the best response. If the quality of the connection degrades during playback, it repeats the process. So "best" is actually the one with the fastest performance at that time.