FCC pushes for Internet access on your TV
Comcast Corp.'s chief executive, Brian Roberts, was gushing last week about his company’s impending takeover of NBC Universal, saying the deal would give consumers what they want, “which is access to all different types of content on different platforms and different times.”
That’s not the half of it -- but it may not be Comcast in the driver’s seat.
If federal regulators have their way, the next big thing on the tech horizon will be a brave new world of Internet-ready, work-with-any-network set-top boxes, offering consumers unprecedented multimedia options through their TVs, not just their computers.
And if this plays out as the Federal Communications Commission envisions, the world as cable companies know it will radically change, making the potential synergies of the Comcast-NBC deal all but obsolete.
“The consumer will be king,” said Colin Crowell, senior counselor to FCC Chairman Julius Genachowski. “You’ll be able to get your own set-top box that does all the whiz-bang things you want it to do, and you’ll be in control.”
The FCC put out the official word last week that it’s seeking input from industry players and other interested parties about changes to rules governing set-top boxes, including a requirement that all boxes work with all networks, whether run by cable, satellite or phone companies.
At the same time, the FCC is pushing ahead with efforts to make sure that broadband Internet access is available to virtually all households.
“Computers may be in 74% of American homes,” Crowell said, “but televisions are in 99% of homes. Clearly, if your television offered a way to easily switch over to the Internet, we would be providing a way for all Americans to get online.”
The upshot, as the FCC sees it, is that consumers should be able to buy multi-system, Net-friendly set-top boxes in a newly energized marketplace where electronics companies vie for your business with innovative features and competitive prices.
And your TV will at last live up to its long-ballyhooed potential as a multimedia device, allowing you to effortlessly access video programming, Internet content or entertainment services.
“Let’s say you’re in the mood to watch ‘Sleepless in Seattle,’ ” Crowell said. “You could either get it as a movie on demand from your cable provider, or go online and see when it’s going to be on Bravo and set your DVR to record it, or go to Netflix and download it.”
Or -- and here’s the nightmare scenario for bulked-up telecom behemoths such as Comcast -- you’ll go online via your television and watch shows and movies at free sites like Hulu.com.
And even if online video content providers charged a fee for access, chances are it would still be cheaper than what you currently pay for programming packages that typically include dozens if not hundreds of channels you never watch.
Although not everyone would abandon their cable or satellite subscription, it’s not hard to imagine more than a few people realizing they can suddenly make do with Internet access alone, eliminating the video portion of monthly telecom bills.
The cable industry is aware that change is coming down the pike. But at this point, it’s putting on a brave face.
“The marketplace is rapidly changing,” acknowledged Brian Dietz, a spokesman for the National Cable and Telecommunications Assn. “There are a lot of industries experimenting with how to bring content to consumers, including the cable industry. The cable industry will adapt to this new technology.”
It might, but it won’t be easy (as newspapers can readily attest). And existing business models could fall by the wayside as TV viewers shop online for the content they want directly from providers, cutting out the middleman.
As for set-top boxes, the FCC is finally living up to the mandate of the Telecommunications Act of 1996, which deregulated telecom markets and also charged the agency with fostering the same competition for set-top boxes that exists for telephones -- in other words, creating a market for plug-and-play devices.
“The vision that Congress had in 1996 will now be fulfilled,” said Matt Zinn, general counsel for TiVo Inc., by far the most successful of the relative handful of companies that have tried to offer their own set-top boxes. But the FCC’s newfound commitment to box freedom represents challenges as well for TiVo, which makes most of its revenue from monthly fees for its digital recording service.
What, for instance, would there be to stop some box manufacturer from combining cable/satellite readiness and Internet access with a TiVo-like recorder that requires no extra fees? In a word, nothing.
Zinn knows this. “If we have to adjust our model to accommodate a new world of competition, we’ll adjust our model,” he said. If the FCC stays the course, that new world is coming, probably sooner rather than later. This is great for consumers.
But if I were Comcast and I’d just plunked down almost $14 billion for a TV network, a movie studio and a bunch of cable channels on the assumption that this would make my cable network more valuable. . . .
Well, I’d be thinking that maybe my assumptions are going to turn out very differently in another year or two.
I wrote last Wednesday about a $350 fee that Verizon Wireless will charge if you end your smart-phone contract early. It didn’t take long to see some action.
A day after my column ran, Democratic Sens. Amy Klobuchar of Minnesota, Russell D. Feingold of Wisconsin, Jim Webb of Virginia and Mark Begich of Alaska introduced legislation that would cap such fees at the amount a wireless company says it’s paying to subsidize the handset.
In other words, if the price of your smart phone is reduced by $200 if you agree to a two-year service contract, the early-termination fee couldn’t be more than $200.
And the amount of that fee would have to go down every month until it reaches zero. Verizon’s $350 fee goes down by $10 a month, but it’s still $110 at the end of two years.
“Changing your wireless provider shouldn’t break the bank,” Klobuchar told me. “Forcing consumers to pay outrageous fees bearing little to no relation to the cost of their handset devices is anti-consumer and anti-competitive.”
Couldn’t have said it better myself.
David Lazarus’ column runs Wednesdays and Sundays. Send your tips or feedback to firstname.lastname@example.org.