Over the holidays I spent time catching up on a lot of video content I had missed. Not unusual, I know, but what was different was how I accessed it. Some I watched using the VOD capability of my cable provider. Some I streamed via an Xbox and either Hulu, Amazon, or Netflix. That video came via my internet connection which was not through my cable provider. It got me thinking about the gatekeepers, both current and future, and why the battle over Net Neutrality is so critical.
You probably haven’t read the latest PWC study on how consumers are using video. You can read it here – it’s an excellent study. The term they use is “videoquake” and I think it’s apt:
This is a wake-up call not just for cinemas and film studios, but also for traditional cable and satellite players and anyone involved in video content production and distribution. The shift is here—alternative forms of video content will continue to rock not only what we watch, but how, where and with whom.
Most of us don’t have more than one high-speed internet provider from whom we can buy service. There is very little competition and, therefore, no market pressure for many of these ISP’s to upgrade their services. In many cases it’s the cable TV provider who is also the ISP. Part of this has to do with the legacy of how cable came to be. The companies were granted local monopolies in return for building out the systems. Seemed like a fair trade at the time. Data to the home was not on many people’s radar when this went on and today these systems are under no obligation to allow anyone else to access their poles or wires. Building out a competitor is extremely difficult.
You might be aware of the impending FCC rule making on net neutrality. I won’t write to 3,000 additional words it would take to explain it but in brief many are calling on the FCC to reclassify ISPs as common carriers under Title II of the Communications Act of 1934. The popular belief is that Title II classification would allow the FCC to protect net neutrality by regulating against paid prioritization. You can read a longer explanation here.
While I’m not sure that’s the right answer (rules from 1934? Seriously?), one effect this would have is to require access to those poles making build out much easier. If you’re a business that has made money (a LOT of money) from a monopoly on bringing content into the home via coax (cable TV) or ethernet (internet service), you can hear the future at the gate and it’s banging rather loudly. Imagine what happens when not just Google Fiber but companies such as Apple or Yahoo offer internet service (everything old is new again – AOL, anyone?) via their own pipes.
With more and more content being delivered on a stand-alone basis via our internet connections, the gatekeeper (now the wireless carriers or the cable companies in most cases) will collect not just the monthly fees but the data associated with the usage. That data might be even more valuable (hmm – a free high-speed internet provider who just sells data? Investors?).
Are you hearing the banging at the gates too? What are your thoughts?