Friday, August 5, 2016

Underappreciated Reasons Why Cable Operators Don’t Want Set Top Box Competition



            Behind all the bluster, misinformation and distortion in the spin campaign of cable operators lies three under-recognized motivations.  Cable operators want to control consumers’ access to content in three ways: 1) digital rights management (copyright); 2) navigation (downstream delivery of content); and 3) search for content.

            It recently dawned on me that cable and satellite television providers don’t want the best in class content search firm, Google, anywhere near video content search.  How best to block innovation, particularly the permission-less innovation, Google could provide? Vilify Google as hell-bent on stealing content, replacing advertisements and otherwise ruining the current model for content access negotiation and retransmission (delivery). 

            To be clear there are muscular, clear and unavoidable laws about what Google can and more importantly cannot do vis a vis copyrighted content.  Have we forgotten what happened to Aereo, the company that thought it had come up with a clever way to avoid copyright liability?  Because Google cannot masquerade as a cable television company, even if it wanted to, it cannot retransmit, repurpose and otherwise take control over copyrighted content for which it has no license to use.  Similarly whatever set top box Google might make, or provide content search software, the content flowing through it cannot be touched. 

            Incumbent operators know the severe limitations on set top box functions.  They helped write the Cable Act of 1992 and other laws that legitimize their carriage of content in exchange for a compulsory copyright license for broadcast content.  For access to non-broadcast content, cable and satellite operators accept limitations on what set top boxes can do.  For example, no set top box can completely eliminate exposure to advertising.  Retransmitters of content know they cannot encourage or induce copyright piracy.  Surely Google would have to comply with similar constraints on how well its set top boxes operate.

            What’s primarily at risk here is the potential for Google to run circles around the set top box functionality offered by cable and satellite operators, even the much touted Comcast X1, or the options Comcast now says it can offers without a set top box.  

            We live in a strange world where the potential for innovation is reframed as somehow harmful to consumers, competition and the quality of video search.

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