The anticipated merger between Comcast and NBC Universal has reached a new stage of its development, causing debate not only in how this nascent Internet TV business model should be designed but also over who should pay for increased bandwidth usage.
The Bandwidth Issue
At issue is the fact that in order to serve up the increasing demand of Internet TV programming, which will come from a variety of sources, someone has to cover the increased costs for bandwidth usage, a large part which is owned and operated by Comcast, who is in the process of acquiring NBCU.
If a Comcast subscriber wants to watch television programming over the Internet using his Comcast Internet service, naturally this will increase the amount of bandwidth this customer consumes, a level of volume not originally considered in Comcast’s service agreements when this customer signed up and not guaranteed to be available to everyone either. Multiply this by the millions and you can see how this bandwidth matter is an issue.
The Content Issue
The other issue, of which we have reported here extensively, is a matter of access rights to content by consumers and government regulation. Meeting this week with the Federal Communications Commission (FCC) the companies argued against stipulations by the commission that the new company provide shows and movies to internet video distributors. Now the companies want the FCC to also define what an ‘online video distributor‘ is because all the lines are getting blurred.
Below is an excerpt from a recent filing, where Comcast and NBC wrote the following:
“The program access rules were designed to regulate traditional linear delivery of video programming, a market with an established business model. In the nascent, rapidly-evolving online video market where there is no established business model, it would be difficult as a practical matter to compare distributors for purposes of determining whether a programmer had unreasonably discriminated against a distributor.”
While these issues are not necessarily related to one another in and of themselves, both are issues that have evolved out of this Comcast-NBCU merger. Which brings up the real crux of the matter, the fact the the emergence of Internet TV is drastically (understatement) changing the shape of the Internet as we know it.
“Internet TV is drastically changing the shape of the Internet as we know it.”
All of this is tied to the concept of ‘net neutrality’, which is the idea that the Internet should be free. People should be able to choose freely between ISPs, or Internet Service Providers. People should be able to choose which browsers they want to use. People should be able to choose which search engines they want to use. You get the idea.
With Comcast the ISP coming into the picture now as a distributor of video content, speculation arises that Comcast might be inclined to restrict which video content you have access to because they would not want to grant advantages to their new competitors (of NBC) such as ABC, Fox, etc.
Regulation vs. Net Neutrality
Obviously these are complicated issues, hardly clear even to the most well-versed experts in these arenas. But can the Internet can not be free? Think about it this way…
Roads, highways, and interstates are public, funded with taxpayer money and maintained by local, state, and federal authorities. You can drive on them freely (pay a toll occasionally), coming and going as you please. The venues you stop at to purchase goods pay to be there, and naturally you pay for what you consume. You have access to these venues by way of the road systems much like you have access to them via the etherweb, on which you pay as a consumer or subscriber but not often as a tax payer, with exception to civic institutions such as colleges, universities, and libraries, towards which tax dollars do go.
Television and radio airwaves are privately and publicly funded by media networks and local broadcast stations which receive revenue from advertisers and also from service providers such as Comcast which receive revenue from subscribers. Public airwaves are funded in part by taxpayer money and member support. You have access to these channels via satellite TV and radio and cable TV or you have access to these airwaves as a tax payer.
But Internet access, because of net neutrality, is not regulated. Thus with the emergence of top dollar video content now becoming increasingly more available online, and companies such as Comcast merging with these content providers, the whole system is going through a shake-up.
Despite these speed bumps, Comcast has stated that the merger will occur before the end of the year, which gives them about one month to accept the FCCs terms regarding internet distribution.
Much like how the music industry was affected by peer-to-peer sharing of music files with software such as Napster in the early days of the Web, which resulted in digital protection protocols and the emergence of services like iTunes, Internet TV and net neutrality will experience their own obstacles, challenging government regulation and big business, and ultimately giving consumers more capability and flexibility…but at what price?