Consumer groups didn’t like the news that the tech giant started talks with Comcast over launching a streaming TV service which would give Apple special treatment and bypass congestion on the Internet.
Since the reported discussions are in early stages, there are many hurdles. In case the companies strike a deal, it would be the second time in 2014 that Comcast has made special arrangements for a tech company after the recent announcement of a deal with Netflix.
The intention of Apple is to allow people streaming live and on-demand TV programming via Comcast’s own network instead of the public Internet. Apple has reportedly asked for a separate “flow” for its traffic, while not asking to prioritize its service over any other one, as this situation would challenge “net neutrality”. The latter is the concept that everyone should have open and equal access on the Internet. However, consumer groups claimed that Comcast is using a loophole in order to circumvent the open access rules.
Apple has long made clear the company has grand ambitions for TV. Thus far, its TV efforts have been disappointing, but it was recently announced that Apple TV had sales of $1bn last year. In the meantime, it is clear that streaming services using the public Internet can suffer over the portion of a cable network connecting to users’ homes, when too many people consume bandwidth at the same time.
As for Comcast, the company was ordered to uphold net neutrality until 2018 after its takeover of NBC Universal. It is known that up to date the cable provider is also in takeover talks with Time Warner, and consumer groups are ready to point at the likely impact on competition.
The FCC’s conditions have an opt out for “managed” services. This can let Comcast circumvent the net neutrality issue. In the meantime, the US Court of Appeals threw out an earlier set of net neutrality regulations, ruling that cable providers were entitled to strike deals with Netflix, Amazon and others to pay for faster services.
The FCC claims the Netflix deal and the emerging terms of any Apple agreement mean that Comcast had found holes in the FCC’s net neutrality ruling. Therefore, the FCC should reassess its rules on open access to the web now, as the entity should be encouraging abundance rather than increased profits via the creation of artificial scarcity.