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Internet TV battles come to head at FCC

By Cecilia Kang

image: Boxee, brings Internet to TV

Changes in the television marketplace have been fast and furious in recent months, and soon more tumult may come by way of the Federal Communications Commission.

A push to break open the technology of the television set top box, and the FCC's review of Comcast and NBC Universal's proposed merger, could chart a new course for the industry as the Internet and television collide, observers said.

First, media and communications firms are watching to see if the FCC proposes a rule in coming months that would standardize set-top-box technology and loosen the grip of cable and satellite providers over the gateway device to the television. The All Video (known as AllVid) idea was first introduced in the FCC's broadband plan last spring, and the agency said it would aim for a December proposal for concrete rules. Observers say the agency is more likely to introduce a policy proposal in early 2011.

Opponents of universal set-top-box standards have joined in arguments against rules. This week, cable, telecom and satellite firms met with FCC media bureau chief Bill Lake to explain the technical barriers that exist to universal standards. Comcast, Cablevision, AT&T, and Verizon were among several companies and trade groups in the meeting who also said a technology mandate would be easily outdated by the time rules were drawn up. Also, any proposal could disrupt contracts already established between networks, and cable/satellite firms would have a harder time branding their services to customers, opponents said.

And, quoting from FCC Chairman Julius Genachowski, the groups said any rule should "preserve the integrity of the pay stream," a reference to the deals networks and movie houses are making with cable and satellite providers to get their channels bundled and sold to consumers.

But firms such as Google and consumer electronics makers say consumers don't want that model any more. Google TV, which places an Internet browser into televisions so viewers can surf the Web, wants customersits to be able to grab as much content as they can from the Web.

"AllVid could jumpstart retail video device competition, giving consumers realchoices among user interfaces, features, and content sources," Google said in its own ExParte last Oct. 13.

Second, the agency's review of Comcast and NBC Universal's merger is now being cast by competitors and public interest groups as the nexus of many hot-button issues in the telecom and media industries. The FCC recently asked Comcast dozens of additional questions about its merger, many related to contract negotiations with content programmers and how the merger could affect online video distribution deals. Analyst Rebecca Arbogast of Stifel Nicolaus said the FCC's review could extend into early 2011.

Observers caution that Comcast could hold back NBC Web content from competitors in the way that Fox temporarily blocked its Web-available shows to Cablevision Internet subscribers during retransmission fees negotiations. According to reports, Fox joined ABC, NBC and CBS in blocking its Web-based shows from Google TV subscribers.

"All of these episodes point back to the Comcast-NBC merger and show why it is so important for the FCC to make sure, through rules or conditions, that Comcast can't do the same," said Harold Feld, a communications law attorney for Public Knowledge. "This would destroy new competition before it even gets a shot."

Comcast argues that it doesn't have any incentive to withhold content from rivals because it wants its shows to get in front of as many eyeballs as possible. It also said to the FCC that any conditions on program access to online video should be an industry-wide rule, and not placed only on the merged company.

On Wednesday, Dish Network, DirecTV and the American Cable Association, which represents smaller cable firms, wrote a letter to the FCC which argued that promises by Comcast and NBC not to block online shows to competitors aren't enough. The letter said Fox's blackout of shows -- including Internet shows -- shows how the withdrawal of programs is being used as part of negotiations.

"The warning signs provided by current events are clear and cannot be overlooked," the satellite firms and small cable industry group wrote. "In the absence of meaningful conditions, the (paid television) industry will find itself facing a similar (or worse) situation in the future."

Other stories of interest:
Battle over the future of TV

Networks block Web shows from Google TV

Netflix moves beyond DVD, tangles with ISPs on net neutrality

By Cecilia Kang  | November 11, 2010; 7:55 AM ET
Categories:  AT&T, Apple, Comcast, Consumers, FCC, Google, Net Neutrality, Online Video, Verizon  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: HP to pay $16.25M to settle DOJ, FCC investigation
Next: Tim Wu on 'The Master Switch' and dominance over the Internet


Comcast and NBC should not be allowed to merge.

Posted by: edismae | November 11, 2010 11:24 AM | Report abuse

" Comcast argues that it doesn't have any incentive to withhold content from rivals because it wants its shows to get in front of as many eyeballs as possible. "
Of course they do. If they have their way, they will be paid for everyone that does. The big three are doing everything possible to ensure that no matter what source you use and no matter what you watch on your TV, they will profit from it. It's bad enough we are paying to watch about 50% programming and 50% commercials as it is. Make "pay" TV like Sirius/XM where they programs are commercial free, and I'm all for it. Why should I pay to watch commercials, annoying pop-ups and 25 year old movies? Put that crap on free-to-air TV. My favorite is the 7 minute info-mercial in the middle of a show - NOT! And the big 3 think they're losing customers at a rate of 500,000 a year because of the economy. I watch TV less and less and if the commercials don't let up, I will probably stop watching and PAYING all together.

Posted by: arthurrussell1 | November 11, 2010 11:24 AM | Report abuse

Why would Comcast want to change anything? Under the current market, as an Oligopoly, they've accrued enough cash to attempt to buy Disney/abc, and now Universal/nbc.
The idea that they get away with bundling channels, and make me pay for hundreds of channels, I don't watch, in order to get a few that I do want to watch, is not right. Also, the customers of those set-top boxes should be individuals, and not the Oligopolies, taking advantage of market conditions.

Posted by: Hattrik | November 11, 2010 5:12 PM | Report abuse

The ONLY thing the FCC needs to worry about is whether their decisions keep or increase competition or reduce competition.

If the corporations have their way they'd reduce it. But competition is GOOD FOR AMERICA.

We'll see whose side the FCC is on, corporations or Americans.

Posted by: kkrimmer | November 12, 2010 12:44 PM | Report abuse

We shouldn't be surprised that the FCC views this narrowly as a battle over set top boxes when it's really about the fundamental question of "what is TV" as I note in

Posted by: BobFrankston | November 12, 2010 7:28 PM | Report abuse

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