To give you an idea of the current state of the cable landscape, here's an excerpt from a filing sent by AT&T
(NYSE:T) last week to the Federal Communications Commission ahead of its net neutrality proceeding:
Allowing individualized dealings between ISPs and edge providers is sound policy for a number of reasons. By enabling smaller edge providers to negotiate special arrangements for the handling of their traffic, flexible net neutrality rules will empower start-ups to compete more effectively against more entrenched and well-heeled rivals. And by enabling ISPs to recover the costs of network upgrades not just from consumers but also from the edge providers whose applications benefit from such upgrades, flexible rules also will promote deployment of additional broadband infrastructure and improved features. They also will reduce the cost of broadband service for consumers, facilitating greater adoption.
In short, AT&T is arguing
that by allowing it and other ISPs to take money from content producers -- or "edge providers" -- in exchange for faster and more dependable bandwidth, companies can offset the cost of building up their infrastructure and, in turn, lower monthly rates for subscribers. In other words, net neutrality will only make things worse for everybody.
And if you believe that, I have an affordable gigabit connection to sell you.
There are plenty of reasons why customer satisfaction for cable companies now ranks below airlines and health-care companies
. Between exorbitant rates, frequent outages, indifferent service reps, and -- above all -- zero choice when it comes to a provider, the AT&Ts, Comcasts
(NASDAQ:CMCSA), Time Warners
(NYSE:TWC), and Cablevisions
(NYSE:CVC) have the public over a barrel with no end in sight.
Meanwhile, saviors are few and far between. Google
(NASDAQ:GOOG) Fiber, with its blazing-fast speeds and low cost, is expanding at a glacial pace
and available only in a handful of towns (read: not yours). Aereo, the online outfit that can stream and record over-the-air network broadcast programming, is being accused of copyright infringement by the fully lawyered-up cable lobby and will soon fight for its life before the Supreme Court
. And Netflix
(NASDAQ:NFLX) just forged a regrettable and highly caustic precedent by paying off Comcast for faster and more reliable bandwidth
It also doesn't help that cable companies spend millions upon millions in lobbying expenditures
, and the FCC -- which should have the public's best interest in mind against these greedy, power-hungry conglomerates -- is headed by a former lobbyist for the cable industry
It would seem that the public is alone in this battle, with no power -- federal, municipal, corporate, or otherwise -- to change anything.
So when word came down that Apple
(NASDAQ:AAPL) was rumored to be in talks with Comcast
to deliver live TV and on-demand video via its Apple TV set-top box, many believed (like a drowning man in desperate search for anything remotely buoyant) this to be a major step toward finally freeing ourselves from the shackles of draconian telecoms.
But at the risk of soaking a parade, it's doubtful that the fruits of this partnership will save us from the woeful cable landscape.
Barclays Capital analyst Kannan Venkateshwar does not believe
the arrangement will amount to anything more than a Comcast app on an Apple TV menu, alongside Netflix and Hulu, with services that are solely available to existing Comcast customers. "Such an arrangement would imply that any subscriber to such a service would have to be a Comcast subscriber who happens to have Apple hardware, rather than an Apple customer who becomes a Comcast subscriber," he said.
Venkateshwar's reasoning is simple: If Comcast, or any cable company, were truly interested in improving user experience with a simple and streamlined (yet versatile) interface, it would have inked a far cheaper deal with TiVo
(NASDAQ:TIVO) years ago. However, as TiVo was never ushered into cable's proprietary domain -- and company profits remain in the billions -- there's little reason this lumbering dinosaur is itching to evolve any time soon.
While Venkateshwar's TiVo comparison is more than a bit specious, there's still no indication that cable companies are poised to jump headlong into simplified content streaming for noncustomers. Only true competition -- actual choice between cable providers free from backroom price fixing and collusion -- will grant us legitimate innovation in the cable industry.
But as we face the very real possibility of the top two cable companies in America joining forces into one giant money-sucking, data-throttling, lobby-boosting, litigation-spewing, free-market-obliterating behemoth, we'd be better off gathering our night's entertainment from our local libraries.
No positions in stocks mentioned.