Monday, April 06, 2009

IPTV v. Internet TV -- Part III -- The FCC & Economic Stimulus Package

As discussed in my two previous posts, the cable companies and other ISPs want to control how video is consumed over the Internet.  They want desperately to maintain their current linear TV/"channel TV" concept (i.e., IPTV).  It's just the way it is -- that business model has worked well for them -- it is understandable.

But, consumers want the control -- they don't want to be controlled.  We want to watch video when, where and how we want it.  We don't want to be punished (i.e., throttled down) for our legitimate (i.e., non-piracy) Internet consumption.  And, contrary to much conventional thinking, we will pay for video programming (either by watching ads, renting the content, or buying the content).  Just because Internet video has not yet been effectively monetized, does not mean that it ultimately will not be monetizable.  I have faith that it will be ... and on a massive scale.  Remember, we are in the very early innings of Internet video.

The massive economic stimulus package has broad implications in the near-term for this battle of control for video over the Internet -- and the entire IPTV v. Internet TV debate.  This is related to the long-standing "network neutrality" debate -- that is, should ISPs (cable companies, etc.) be able to control or throttle back bandwidth to users of bandwidth-intensive activities such as Internet viewing?  Cable companies say "yes" -- Silicon Valley and consumers say "absolutely not."  As part of doling it federal funds, the FCC is currently considering the issue of finally substantially upgrading our Internet system in the U.S., which lags significantly behind the networks of other developed countries.  Hence, the issue of network neutrality is directly in the FCC's sites.

If the cable companies and other ISPs win this debate and are given the government's stamp of approval to punish Internet video usage outside of their closed "walled garden," then IPTV will win ... in the short term.  But, if not, Internet TV advocates (including most consumers) will have reason to cheer, as equal access to bandwidth means more choices to them.  And, ultimately, this not only would be good for consumers, it would be good for producers of content.