Advanced Television

Comcast and Apple in streaming deal?

March 24, 2014

Apple is in talks with Comcast about a deal for a streaming-television service that would use an Apple device and express treatment on Comcast’s network to ensure QoE, according to US reports.

The discussions are said to be in the early stages but the deal, if sealed, would mark a new level of cooperation and integration. Apple’s intention is to allow users to stream live and on-demand TV programming and recordings from the cloud effectively taking the place of a traditional cable set-top box.

Apple, apparently, wants the new TV service’s traffic to be separated from public Internet traffic over the ‘last mile’. Apple’s goal would be to ensure users don’t see any difference to Comcast’s TV transmissions to normal set-top boxes. Apple has spent several years exploring various avenues to enter TV, but it has been unable thus far to find business models that media companies and cable providers find appealing.

Apple and Comcast aren’t yet close to an agreement, reports the WSJ, and the companies differ on how deep a relationship Apple should have with Comcast’s customers. Apple has proposed that users would sign on to the new device using Apple login IDs, and it is interested in controlling customer data,. Apple also has asked for a cut of the monthly subscription fees paid by customers, WSJ sources claim. Comcast wants to retain significant control over the relationship with customers and the data.

Apple must still acquire significant TV programming rights from media companies, and Comcast would want to ensure that the price Apple has to pay to acquire rights wouldn’t cause the service to be priced higher than traditional pay-TV service, this person said.

Apple has had on-off discussions since at least mid-2012 with Time Warner Cable. Those talks, known internally at Time Warner Cable as ‘Project Jupiter’, came to a standstill when the cable operator became a takeover target, the people said. Comcast in February agreed to acquire Time Warner Cable for $45 billion.

Under the plan Apple proposed to Comcast, Apple’s video streams would be treated as a ‘managed service’ those services travel on a special portion of the cable pipe that is separate from the more congested portion reserved for public Internet access, so technically, as with the Comcast/Netlfix deal, Apple isn’t asking for its traffic to be prioritized over other Internet-based services. Those distinctions are important because of merger conditions Comcast agreed to as part of its 2011 acquisition of NBCUniversal. Those ‘net-neutrality’ restrictions, which will be in place through to 2018, say Comcast cannot “unreasonably discriminate” in how it transmits network traffic.

The Federal Communications Commission is in the process of drafting net-neutrality rules for the broadband industry after the US Court of Appeals for the District of Columbia rejected an earlier set of regulations the agency had in place.

Comcast has been aggressively investing in and deploying its own Internet-connected set-top box and guide—dubbed ‘X1’— that far eclipses capabilities of its old boxes. To date, Comcast has limited the managed-video services it offers only to its own cable TV services.

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