29 Comments

Summary:

A proposed new Apple service that resurfaces a dicey issue about Comcast’s online TV business just when the company is about to face new merger conditions? That’s some funny timing.

Apple TV remote
photo: Flickr / Robert S. Donovan

News that Apple is talking to Comcast about building a joint TV service offering took the internet by storm Sunday. But details and timing of the story seem just too good to be true.

The Wall Street Journal reported late Sunday that Apple was talking to Comcast to launch a live TV service, which would run on an Apple-built device, but use Comcast’s cable infrastructure, and bypass any potential internet slow-downs by essentially running as a managed service. That quickly resulted in critics crying foul for violating the spirit of net neutrality — but the real deal breaker here seems to be Comcast’s merger with Time Warner Cable.

Apple and Comcast both want to own the experience

On the surface, the story seems like yet another Apple TV rumor. Apple has been for some time trying to figure out how to capture the living room, and most recently, it had been talking to cable companies to basically build a better cable box. The idea was, according to several reports over the last two years, that Apple would present live TV programming with an Apple look and feel, but in partnership with cable companies, and thus without the need to buy the rights to each and every network.

One of the cable empires mentioned in those previous reports was Time Warner Cable. Now, Comcast is buying Time Warner Cable, so it would only make sense that Apple would continue those talks with Comcast, right?

Well, not so fast. Comcast has long been the company most concerned about owning the relationship with the customer. For example, Comcast subscribers haven’t been able to access HBO’s HBO Go app on the Roku because the cable company would like customers to go through its own apps instead.

And, in all fairness, Comcast is also one of the pay TV operators that has invested the most resources into building next-generation pay TV experiences for its customers, including its X1 set-top-box, its impending cloud DVR and its upcoming X2 platform. It’s unlikely that Comcast executives would feel the need for Apple to build the company a better TV user interface.

That’s some curious timing for a dicey issue

Now take that already unlikely scenario, and add another red herring: managed services. Apple wants Comcast to treat its service separate from the public internet, and ensure that it’s not subject to last-mile congestion when the rest of the neighborhood is busy binge-watching House of Cards on Netflix, according to the Wall Street Journal.

On the surface, that’s again something that we have heard about before. Comcast already treats its own TV Everywhere app on the Xbox 360 as a managed service, and for example exempts any video streams requested through that app from its data caps. Net neutrality activists have long taken issue with this, but the FCC decided not to go after managed services after it got push-back from ISPs.

But the real issue here is not net neutrality, or at least it’s not the primary issue. Comcast has been subject to strict conditions about how it deals with competitors ever since it merged with NBC, and chances are, those conditions will be extended and possibly even tightened when the merger with Time Warner Cable goes through.

Shining a light on managed services just when the severity of these conditions is up for debate seems like a very strange coincidence indeed. It’s almost as if someone said: Hey, here is this big operator that is soon going to own 30 percent of the country’s pipes going into people’s homes, and it wants to strike a special deal with Apple. Shouldn’t regulators make sure that others get the same treatment? For example, what about Dish, DirecTV or Sony, all of which are looking to compete with Comcast with their own TV offerings?

Call me a skeptic

That’s why I don’t believe that we will see a service like the one painted by the Wall Street Journal anytime soon. Now, I’m sure the two companies have discussed this, just like they have probably discussed a whole range of other options. But that this one surfaces right now seems just a little too convenient.

Image courtesy of Flickr user  Robert S. Donovan.

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  1. Skeptic***
    Not going to call you “sceptic” Lol
    Fair points made though

    1. sceptic is the British spelling

      Lamont

      1. Better than “septic” at least.

    2. Stephen Robinson maquinna Monday, March 24, 2014

      You guys never think he may have learnt English and not American English? Sceptic is perfectly acceptable.

      1. Updated with American spelling of skeptic. Thanks!

      2. Thanks. You are a good neighbour. :-)

      3. “Even if you do learn to speak correct English, whom are you going to speak it to?” (Clarence Darrow)

  2. Getting the same deal as a company that has over 150B in cash might be a huge problem too and we go back to neutrality. If Apple “invests” a bunch of billions into killing others ,getting the same deal would be something they would insist on.Doing things like this is in their nature.
    Of well, the internet was fun while it lasted.

  3. I’m skeptical of any journalist that can’t spell skeptic.

    1. Stephen Robinson Jl Monday, March 24, 2014

      I’m sceptical of someone who thinks the American way is the only way.

  4. short away if that’s how you feel.

  5. If you are going to deal in rumours, at least do it intelligently. Ever stop to think about where Comcast is getting the cast to buy Warner?

    1. It’s an all-stock deal.

  6. Your attempt to defuse this story with several roadblock scenarios falls on it’s face when confronted by Apple’s design – fit & finish.
    If Comcast does not play ball with Apple are they willing to let a competitor partner with an Apple best in breed player?
    Worked quite nicely for ATT & the iPhone rollout.
    I also feel this Apple -Time Warner partnership pushed Comcast into the merger talks.

  7. You lost me at Sceptic

  8. I’m confused — if the story is fishy, who exactly hatched it? Who benefits from a false story about an Apple box/service on Comcast?

  9. Apple Investor Monday, March 24, 2014

    Your blog stinks.

  10. Samroberstson Monday, March 24, 2014

    Considering that Apple is busy building 4 huge data centers, NC, OR, NV, and Hong Kong, I think Apple is more interested in supporting net neutrality.

    Remember, Apple used to own a minority share in Akamai.

    I don’t think Apple is going to sell out when it comes to net neutrality, as it would only benefit an unproven unreleased product, not the rest of their portfolio. It would hurt the cost of the data distribution of FaceTime calls, iMessages, and the trillions of push notifications that they send out.

    1. How is net neutrality at all helpful to the products you mention? In fact, those are exactly the kind of products that could benefit from the higher quality of service that net neutrality prohibits.

      1. Samroberstson Tim Monday, March 24, 2014

        Those data centers have to pass data thru Cogent and Level3. Why would Apple want to pay extra $ for priority when they would prefer all data be treated the same.

        A lot of the WSJ article is vague.

        Could the talks just be about getting Comcast live and VOD services equal treatment on the AppleTV box as a Comcast STB?

        Has anybody alleged that iTunes video will get priority treatment over the Netflix video on the same box?
        Or that Netflix on an an AppleTV will get priority over Netflix on a Roku box?

        Too many people are speculating on so many unknowns….

        Does Time Warner TV Everywhere currently give their own apps (video streams) on tablets and Rokus, priority over the Netflix apps on those devices? I don’t know.

        1. I can imagine an end user might want FaceTime packets treated with higher priority than a movie download. Why should this be prohibited? Seems to me we have more of a shortage of network capacity than network applications. How does prohibiting network operators from charging more for higher quality network service help increase network quality? If you think they are just getting rich on all the money coming through the door, why is Comcast worth only 131B, which is less than Facebook, only about 6 times Netflix?

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