For years, Internet service providers have been scheming of ways to get you to pay more than a ~$40 per month flat fee for residential broadband Internet access, with little success.They may finally have an excuse with Apple’s new TV gadget — supposedly called the iTV, and supposedly launching sometime later this year.
The iTV — which is a followup to Apple’s lousy, unpopular first effort in the Internet TV market, the Apple TV — could finally be the device that gets a lot of people talking about watching more web TV shows on their big-screen living room TVs.
Sure, some people have been doing this for years, either by hooking up their laptops to their TVs, or via boxes like the Xbox 360 or Roku. But hopefully Apple has learned something over the 3 years that Apple TV has been on sale, so it could come out with a new device that a lot of people actually want to use.
At very least, iTV could at least get a lot of people excited about the idea of using their TVs as living-room computers, especially for watching Internet video on their TVs, via the likes of Netflix, Hulu Plus, ABC, and MLB.com apps. (Same for Google’s forthcoming, similar Google TV service.)
This should scare America’s big Internet service providers, such as Comcast, Time Warner Cable, AT&T, and Verizon. And it may finally give them the reason they need to scrap all-you-can-eat Internet access, and start charging for access based on metered service, monthly allotments, and overage charges. (The way people are long used to paying for electricity, cooking gas, etc.)
AT&T recently did this for its wireless subscribers, just as the new iPhone was set to come out, and telecom companies are salivating over the idea of making this work for high-speed residential access, too.
Not only because their customers will drive up costs by using more bandwidth to stream hi-def video, but because the time and money they’re spending watching Internet video through their new iTV devices will probably count against time and money they would be spending on old-fashioned cable TV via their set-top box.
Sure, so far, it hasn’t worked out that way — despite all the growth of Internet TV, people are still paying for more regular TV than ever. I even re-subscribed to cable after more than a year as a “Hulu household” because I missed it.
But no one has made a box that puts lots of great Internet TV on your big-screen TV very well yet, and perhaps Apple’s will be the first.
Why would Apple’s new gadget change so many peoples’ behaviour? For evidence, look no further than the wireless industry. There were plenty of smartphones before Apple’s iPhone came along. But it was the iPhone that actually got normal consumers using their phone for the Internet, crushing wireless networks with its full-fledged web browser and easy-to-use interface.
It’s possible that iTV will do the same thing for Internet TV: Provide an interface and content library that’s good enough to finally get a lot of people watching web TV instead of cable.
And if that happens, look out. The average Comcast subscriber spent $127.78 last quarter for service, and the majority of that bill was TV service. The minute Comcast starts seeing itself lose some of that TV revenue because of gadgets like iTV, it’s going to make sure that broadband service makes up the difference. And that’s where metered bandwidth comes into play.
To be sure, this will be a tough sell. Time Warner Cable was forced to stop its metered-bandwidth trials in 2009 after a huge public outcry. But that was partially because the company stupidly set bandwidth caps too low and made overage fees too high. Any new system that’s going to pass the smell test will have to be one that people barely notice at first, and only start to rack up bigger bills once they really start using more bandwidth for hi-def video.
And the broadband providers may be even more reluctant than usual right now to mess with peoples’ bills because they are separately trying to negotiate regulatory freedoms and not be forced into what people call “net neutrality.” This would force them to treat all Internet traffic the same exact way, and would prevent them from ever charging content companies like Apple an extra fee to give its traffic an “express lane” over their networks.
If ISPs did anything drastic now to scare consumers, they would definitely be in for some punishment, and they really don’t want to be over-regulated. So that may force them to delay metered broadband a bit, just to keep people from going crazy.
But it’s hard to imagine it’s not coming eventually. While people are still watching lots of cable TV right now, it’s hard to believe that the Internet isn’t eventually, over 10 years or so, going to eat into some of that. And with that, will come metered broadband access.
Who knows, maybe the new iTV will be a big bust like the Apple TV before it. But maybe it’ll finally be the gadget that gets Internet providers to flip off the all-you-can-eat bandwidth switch.
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