Can Cable Block the Google TV Revolution?

The latest debate on the Cable versus Google  has an interesting twist, with potential for consumer benefit or loss depending on whether the FCC does a good job or bad.

Behind the scenes at the Federal Communications Commission, a quiet war is being waged over the future of television. It isn’t getting as many headlines as net neutrality or the Comcast/NBCU merger, but the debate is nearly as important. It’s about how far Google, Sony, and their allies can take their Google TV system.

 

In their bid to get the FCC to help Google TV and similar devices, “Sony/Google are asking the Commission to ignore copyright, patent, trademark, contract privity, licensing, and other legal rights and limitations that have been thoroughly documented,” the National Cable and Telecommunications Association (NCTA) warned last Wednesday.

What is NCTA talking about? The trade association is trying to set limits on how easy it will be for devices like Google TV to access pay TV content and reassemble it into something that will reconfigure both television and the internet.

That’s at the heart of the FCC’s proposal for an AllVid system, which Google very loudly supports. AllVid doesn’t exist yet, but the idea is to mandate an industry-wide gadget that you could plug into your broadband router and connect to your cable TV provider, then watch online video and pay channels through a variety of AllVid-friendly devices. Not surprisingly, Google and Sony love this idea, because it could transform the Google TV from just a neat product into a revolution.

Big cable hates the proposal, because that revolution could leave multi-video program distributors (MVPDs), if not in the dust, at least working in a far more competitive video environment. But the AllVid proposal faces real technical challenges that have yet to be worked out.

At present, Google TV is a suite of devices that integrate streaming IP video services like YouTube with various kinds of third-party content, all searchable on a Google TV screen. You can get in on this by buying the Google TV standalone HDTV set, or by hooking your extant screen to a Logitech Revue or Sony Internet TV Blu-ray Disc Player.

As our own Chris Foresman notes, the gear is expensive and kind of clunky, but you can also use your phone as a remote control, and voice command functionality is on the way.

The biggest challenge for Google TV has been finding pay content partners. The DISH network is accessible via the device. And Google has clinched content deals with HBO, CNBC, Turner Broadcasting and the National Basketball Association.

But other providers are loudly declining to hop on the bandwagon, most noticeably Viacom, which has blocked full episodes of its fare from the Google TV browser (no big shocker here; the company is suing Google’s YouTube for $1 billion over copyright infringement claims).

So what would turn Google TV or any similar gadget into a truly revolutionary machine is an interface that easily allows any HDTV/set top box system to tap into any couch potato service, while simultaneously serving as a gateway to the Internet, with all its search, cloud, and social networking functionalities. For millions of households that still experience the ‘net as less of an imperative than television, the internet would become television.

The FCC understands this. At first glance, the Commission presents the AllVid proposal as a replacement for the agency’s failed CableCARD — that little data wedge that was supposed to let you pick your own set-top box and use it with any cable operator. CableCARD came with few functionalities and various installment roadblocks, so consumers rarely used it.

But AllVid’s other goal is to ramp up broadband adoption and use. “Just as a shopping mall presents customers with numerous retail outlets, smart video devices would offer viewers a single window into pay TV content and Internet content,” the Commission’s Notice of Inquiry on AllVid explained, “as well as content that a viewer has already bought or archived.”

That’s right, bring it on, dittoed Google and its sometime allies in the media reform movement during a meeting with the FCC in late January. “Providing a common IP-based link between gateway and client devices will break down the last, archaic distinctions among classes of devices that impede competition and that have been eliminated in markets other than television,” they wrote.

Furthermore: What is necessary to empower consumers and to create device competition are technical standards that enable any device to present a unified user interface that offers choices of both MVPD and non-MVPD programs and services, and home network content. Existing FCC regulations allow each MVPD to offer such a unified interface if it wishes, but have not succeeded in allowing manufacturers and retailers of competitive devices to offer such a product on a national basis. The tools are at hand to address this lack through an AllVid rulemaking that references private sector industry standards.

But the cable industry and its movie studio allies have posed a host of challenges to AllVid. Big cable insists that the metadata used to create on-screen program guides is copyrighted. The Motion Picture Association of America protests that the AllVid idea would put studio content painfully close to sites like The Pirate Bay.

The proposal presents the risk that “legitimate MVPD and online content sources will be presented in user interfaces alongside illegitimate sources (such as sites featuring pirated content),” MPAA warns. “In essence, this ’shopping mall’ approach could enable the purveyor of counterfeit goods to set up shop alongside respected brand-name retailers, causing consumer confusion.”

It’s all just… not fair, contends the NCTA. In its words, Sony and Google seek: a Commission mandate for CE device manufacturers to extract piece parts of a multichannel offering for each CE manufacturer to remake into a service of its own design, as though each MVPD were a wholesale distributor of all content in all windows for delivery to all devices on every platform. Such a mandate would not only violate the affiliation agreements and intellectual property licenses under which multichannel programming is obtained and retailed, but it would also stunt the innovations that are taking place to provide consumers flexible access to content that programmers are incented to offer.

The programming contracts and licenses define such critical features as channel placement, the type of advertising suitable for use with a particular programmer’s brand, uniform nationwide presentation of programming, and how MVPDs market to and retain their subscribers. Such terms cannot be replaced by merely passing along a “copy once” command, as Sony/Google suggest.

There’s no doubt that there are plenty of technological and legal roadblocks facing this idea. And as we’ve often noted, it’s one thing to create a device mandate; it’s another to make it work.

But the cable operators know that the AllVid concept isn’t that far afield from what Congress ordered the FCC to do in Section 629 of the Communications Act: adopt regulations to assure the commercial availability of multivideo programming over devices “from manufacturers, retailers, and other vendors not affiliated with any multichannel video programming distributor.”

NCTA’s filing notes that lots of these gadgets already exist. It also interprets Section 629 to suggest that the law only applies to pay TV fare, not IP video. But at the end of the filing, the trade association poses the real concern.

“Sony/Google are asking the Commission to lock MVPDs out of tomorrow’s video marketplace,” NCTA warns.

The offerings of MVPDs and online video distributors (“OVDs”) are all assembled, crafted, and sold in an environment in which each provider operates as a retailer—but in which Sony/Google are trying to convert only MVPDs into wholesalers. Sony/Google inexplicably claim that cable operators and other MVPDs could offer all MVPD programming and all Internet content through a single unified user interface. That is absurd. Amazon, Apple, Netflix, Sony, Google, and many others negotiate to obtain their own rights, and to construct retail offerings that they define. They do not open their storerooms and databases for MVPDs to take as inventory and make a part of their own ‘unified offering’ in another ’store.’

Actually, Amazon and Google both provide API interfaces that allow developers to market their services and products in all kinds of contexts. But the issue here is obvious. The Google TV revolution would turn big cable into just another player on the video market, not its central participant.

Expect the cable industry to fight this version of “tomorrow’s video marketplace” with every weapon in its arsenal.