Why Big Cable Fears AllVid — and Why It Shouldn’t

This week, the National Cable and Telecommunications Association sounded the alarm bells in a letter to the FCC about AllVid, an initiative the rulemaking body is considering that would replace the moribund CableCard effort and give consumers greater choice of video equipment for pay TV and over-the-top (OTT) video services.

As I examine in my weekly update at GigaOM Pro, the letter from the industry association┬ápaints a “sky is falling” scenario for the cable world should the FCC turn the AllVid Notice of Intent into a rule, particularly if the rulemaking body incorporates suggestions from Google and Sony that call for greater abstraction of video content and metadata from carrier devices and UI. This would allow the consumer electronics OEMs (and, by extension, Google) to mix and match pay TV and OTT services and present them side-by-side in a unified interface.

Certainly, as Ars Technica points out, this is an epic battle in which the cable industry will use its considerable resources to resist the types of rules that would give the Googles of the world more freedom to exert control over the interface and the content delivered over carrier networks.

But is AllVid really as scary as the cable industry portends? Yes and no. How scared cable should be depends on how much freedom the FCC gives to non-carriers to integrate pay TV services. Yet the cable industry paints an overly dire picture in which AllVid could potentially relegate cablecos to a mere wholesaler of video services while also putting them in violation of their content licensing terms.

While Google and Sony ask for greater freedom in their ability to present video content and also greater freedom to move away from, as they put it, “the archaic model of renting captive, proprietary┬ádevices with limited interoperability,” the FCC document makes clear it will allow the service provider to control the AllVid access and authentication device to ensure the provider can innovate at the service level.

Additionally, while the cable industry seems so decisively cup-half-empty about AllVid, this new technology would enable its video services to be delivered to up to six devices within the home over IP, which opens up potentially huge new opportunities for providers to monetize their services. Today the cable provider is pretty much left standing idly by as OTT services (in particular Netflix, Hulu and Google TV) are being baked into all forms of new CE devices. With an AllVid video hub in a home, they could essentially deliver their services to any device, and they could create unique services for, say, portable devices and gaming consoles.

Will big cable take advantage of it? Possibly not, mostly because they are still clinging to an old-world model centered around proprietary devices and complete carrier control. If they’d stop and think creatively, foster new partnerships with innovative CE manufacturers (and software makers such as, dare we say it, Google), they’d see the opportunity to make up for CableCard’s lost decade, put their services on all kinds of new screens, and for once make consumers happy through innovation rather than make them angry about limitations.

Read the full post here.

Image courtesy of: flickr user Bohman

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