Apple is in talks with U.S. cable operator Comcast about a streaming TV service, according to reports. In the proposed service, content would reach customers via a set-top box provided by Apple and would be given priority on Comcast’s network. According to sources, the talks are in an early stage, and the parties are not yet close to any agreement. In order for the service to be feasible, Comcast would need to invest significantly in network equipment and other technology to support it. For its part, Apple reportedly wants a share of monthly subscription fees and would require customers to use Apple logins to access the service.

Tarifica’s Take

While any Comcast–Apple TV partnership is still a long way away from coming to fruition, the very possibility of such a deal is intensifying the concerns of advocates for net neutrality. The present talks come just a month after internet movie content provider Netflix signed a deal with Comcast providing its signal with a quicker path through the cable company’s network. Another element of the context is that the net neutrality rules of the Federal Communications Commission—the U.S. regulator—were struck down by a U.S. court in January, and therefore the regulator’s policy with regard to the issue is currently uncertain. Even under the old rules, though, a service like Apple’s could have been approved, because Apple reportedly proposed that it be classified as a “managed service,” a category that includes VoIP calling and video-on-demand and that is counted as separate from ordinary internet traffic. If an Apple–Comcast deal were to be agreed upon, it would certainly attract careful regulatory scrutiny because of the sheer size of the players, if for no other reason. Comcast is the largest cable and broadband service provider in the U.S.

However things turn out, the degree of intensity that attaches to these debates over net neutrality provides some food for thought in connection with a matter of present concern to the mobile telecom world. MNOs, in their search for new revenue and relevance in an era of saturation and declining ARPU, have been exploring a plethora of ways to avoid devolving into the proverbial “dumb pipes.” We have used that expression many times in our writing, and we stand by our advice on the matter. But Comcast and similar fixed line entities are essentially pipes, and their potential for control makes them anything but dumb, especially when it comes to negotiations with content providers eager to pay for access.