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TV Everywhere to Spark Antitrust Concerns?

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[qi:032] NBC Universal (s ge) General Counsel Rick Cotton, speaking at the Digital Media Conference in Washington, D.C., on Thursday, brushed off concerns that the deal between Comcast (s cmcsa) and Time Warner (s twx) to test the feasibility of TV Everywhere was a first step toward bringing TV on the Internet under the control of Big Media.

“I know there’s been some static in the system that says this will somehow limit access to content online, but this is about increasing access,” Cotton said. “These are subscription networks now so it’s not really a big surprise that they would be subscription networks online as well.” He also shrugged off fears that the collaboration between programmers like Time Warner and ISPs like Comcast represented some sort of unholy cabal worthy of antitrust scrutiny from the government.

“They shouldn’t have called it TV Everywhere because what we’re really talking about is cable TV everywhere,” Cotton told me after his panel. “The idea is you would go to Fancast, or to Hulu, and there would be free content, just as there is now, and there would be subscription content, which you could access if you’re a subscriber.” It’s just like cable TV, he said. “There’s free, over-the-air content, but there’s also subscription content you can get by subscribing to cable.” The deals between subscription network owners and web video portals, he suggested, would be no different from the perfectly legal deals that currently exist between the networks and cable MSOs.

Maybe, but that’s only the simplest use case being discussed. What happens when we get to Time Warner CEO Jeff Bewkes’ nirvana where any multichannel video subscriber — whether to cable, satellite or telco TV — can access any of the content they subscribe to from anywhere on the web, whether directly through an ISP, through a web portal like Hulu or on mobile platforms? Apart from the sheer complexity of such a system, making it work will require a degree of information-sharing among nominal competitors that practically begs for antitrust scrutiny.

Let’s say I want to catch up with a missed episode of “In Treatment” by watching it online. I go to a web portal — we’ll call it YooHoo — and find the episode. Since I pay for HBO through my Comcast cable subscription I ought to be able to access the episode, presumably by typing in a password or some other authentication method. For that to work, however, YooHoo has to know something about my relationship with Comcast. Maybe Comcast owns YooHoo, in which case, no problem. But what if some other media company owns it? It now has access to information about my Comcast subscription.

Now let’s say I leave the house and want to access the same episode on my handheld device using Verizon Wireless’ (s vz) V-Cast service. Now Verizon has to know something about my relationship, either with Comcast or with YooHoo — or both. Apart from whether that’s something Comcast would want to do — Verizon has recently begun soliciting me with offers for FiOS, after all — what we’re really talking about is multiple competing service providers sharing information with each other (or with the same third party) about prices, payments, customer service and behavior and all sorts of other data.

Such a system would just be ripe for abuse, even if intentions were pure going in. And it would only get worse as the number of ways to access the content increased. Of course, you could always break up the vertical monopolies among programmers, distributors and service providers and the problem would be solved, but somehow I don’t think that’s what Bewkes and Cotton are talking about.

Paul Sweeting is the author of The Media Wonk blog. He’s covered digital media and policy issues for over a decade.

19 Responses to “TV Everywhere to Spark Antitrust Concerns?”

  1. Right now I buy a package of content from Comcast which they distribute to me over their cable network to my home. They reserve a portion of the available bandwidth on their network for my cable broadband. Their next generation technology (Docsis 3.0) reserves a much larger portion of the available bandwidth for broadband. Now when they deliver these higher speeds to me, streamed content (Hulu, Netflix, etc) and downloaded content (iTunes, Amazon, etc) will be that much faster and easier to use. In fact I might ditch my content package altogether and go naked broadband. In order to compete with the wider array of content options available over broadband, Comcast is going to offer me the same package of content I bought from them, for use on any internet connection anywhere – it is at first a defensive measure for them to guard against my ditching their content package altogether. Now here is where it gets potentially interesting: As a TV Everywhere subscriber, why should Comcast bother to continue my content delivery over the portion of their network reserved for such content. Why wouldn’t they just send it to me over my broadband pipe. And as this is content that I have subscribed to, maybe the Ts and Cs f my subscription will say it can be prioritized over other traffic. So long net neutrality.

  2. G–if that is indeed your real name, I think you missed the point. It doesn’t matter what the mechanism is. The issue for regulators will (or should) be that information from competitors must be pooled in one market (by whatever means) to maintain high prices in another.

  3. “Let’s say I want to catch up with a missed episode of “In Treatment” by watching it online. I go to a web portal — we’ll call it YooHoo ……. It now has access to information about my Comcast subscription.”

    Paul – NO it does not work that way – Ever heard of billing system integration – shadow IDs, etc. etc- please learn (speak to people) who know how MSOs operate.

    “I’m not a lawyer, let alone an expert on anti-trust law, but that seems to me to be a somewhat different case from what we have in the mobile phone industry” —–Thanks for the admission – and now change the title of your post above – to “TV Everywhere – I just don’t have clue how it will work”

  4. Steve–I agree. In my own reporting on the issue it was pretty clear that the mobile-phone HLR/VLR system is exactly the model the telcos and cable MSOs are thinking about for video. It took a long time to get that system working in mobile, though, and given what it’s done to keep roaming charges high, I’m not sure it’s something consumers ought to be looking forward to repeating. The other problem in this case is that, for the MVPDs, it isn’t really even about online video. At least in the case of mobile roaming there was concomitant consumer benefit in being about to use their cell phones outside of their provider’s network. Here what we’re talking about is protecting the value of MVPDs’ extremely high-margin basic video subscriptions by making cord-cutting less viable. I’m not a lawyer, let alone an expert on anti-trust law, but that seems to me to be a somewhat different case from what we have in the mobile phone industry, involving different trade-offs for consumers and thus likely to draw scrutiny–at a minimum–from regulators.

  5. They’re trying to build a system that is more complex than what exists now. Consumers are never going to go for it. They probably won’t even understand it. It reminds me of the Divx DVD system that Circuit City tried years ago.

    • I have Timewarner Cable (Roadrunner) and I think I get it. I pay for the service, not only do I get cable through cables, I get cable through internet. Bada bing bada boom, amirite?

      • I didn’t mean that customers wouldn’t understand the CONCEPT. I meant that customers aren’t going to understand how to navigate it all. How does TV Everywhere know if you are a subscriber or not? How do you navigate which tier or cable package you have? Will you see shows that won’t play for you because you don’t have that channel? What about blackout periods that depend on where you live and/or which channel the particular show or game is on?

        Customers aren’t going to adopt something more complex and restrictive than what they have now. They’ll just go to Hulu and press play.

  6. Tom Coseven

    Paul, you might want to think about how mobile phone roaming has worked for years with HLR/VLR and AUC. Quite a lot of subscriber information shared between competitors, including many of the features you’ve paid for and even balances if you are a prepaid customer. The future IMS model that MSO’s and tecos have been planning is based on the mobile operator subscriber database model, including authentication. “Captive service roaming” is something the web world has never embraced, but it is definitely the way telcos and now MSO’s think.

  7. Brett Glass

    There’s nothing intrinsically wrong with having a subscription video service. However, for cable companies to be able to require that you subscribe to their broadband service to view the content is an anticompetitive tie.

  8. “Now let’s say I leave the house and want to access the same episode on my handheld device using Verizon Wireless’ V-Cast service. Now Verizon has to know something about my relationship, either with Comcast or with YooHoo — or both.”

    Why would they have to know about that? I imagine this would work like ESPN360, where you have to sign up for an account from your home to prove your eligibility, but then after that you could login with the same credentials from anywhere. I don’t see why a third party would have to know that you were authorized to view the content since that would make the whole system vulnerable (as you mention, Verizon may decide not to allow access) and hard to scale since you’d have to make deals with every service provider. The only thing is you have to make sure to prevent abuse, such as sharing of the account.