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The Apple TV Revelation That Means Nothing

To show you how desperate the media has become when it comes to news about a forthcoming Apple product — any forthcoming product – there is a certain report that indicates Comcast knows something about the next Apple TV.

Or maybe not.

In an FCC filing designed to explain why it’s a great idea for Comcast and Time Warner to merge, there’s a single phrase that is giving the media goose bumps. It comes from a paragraph designed to explain the competitive landscape in the broadband and cable industries:

Today, Google competes as a network, video, and technology provider, and 8 out 9 of the next Google Fiber markets the company announced are in Comcast or TWC areas. Apple tablets are viewing platforms for cable services even while Apple offers an online video service, Apple TV, and explores development of an Apple set-top box. Microsoft just announced that it will feature ads on the Xbox One, creating a new video advertising platform. And just last week, Amazon announced its own set-top box while it continues to leverage its unequaled sales platform and family of competitive tablets to promote its burgeoning Prime Instant Video business.

So is that the proof we’ve been waiting for about the next Apple TV?

Read it again, “explores development of an Apple set-top box.” Is that some sort of amazing revelation of what’s going on behind the scenes in Cupertino, or does it represent something we already know? Unfortunately, the statement is poorly phrased, because the Apple TV is a set-top box that’s already available, and the statement that development is being “explored” is no great revelation. Apple already admits the Apple TV is an area of intense interest, so you would expect new versions to be in the works. It’s very possible a major upgrade is already forthcoming, if you can believe yet another set of Apple TV rumors.

Now Comcast’s statement is meant to be self-serving. It’s designed to convince the FCC, who would predictably be skeptical about the extent to which a merger of the number one and the number two cable providers would impact the business, that the market is in fact competitive.

But consider the truth, which is that, in many cities, Comcast or Time Warner Cable may be your only broadband Internet options. Well, other than satellite Internet, which has its own problems and is usually not a cost-effective alternative, except for those who live in outlying areas where there is no choice.  Google Fiber, offering gigabit Internet, is being test marketed in a handful of cities, with no indication when or if there will be a nationwide rollout. But it should serve as a message to ISPs that it is possible to give customers something far better than what they already have.

If you’re talking about TV service, well there is satellite, but it’s rare to find more than one cable provider. As a practical matter, it doesn’t make a whole lot of sense to build out two systems, except where a traditional telecom is leveraging old-fashioned copper wire for TV. So we have CenturyLink’s Prism, which does just that, though it means that your broadband Internet speeds are limited since bandwidth is being shared.

The long and short of it is that Comcast and Time Warner cable serve markets that largely do not overlap and for which there is little if any direct competition. So the argument in favor of the move seems promising enough. Certainly it would give cable companies more power to negotiate with the entertainment companies who have on occasion blocked service to customers during disputes over carriage fees.

I wouldn’t presume to know if the merger will sail through or not, but if it does, it would probably mean that other cable companies would also consider merging to leverage monopolies in more cities. It’s not the same thing as the failed merger between AT&T and T-Mobile, where the choices available to customers would have been reduced.

When it comes to Apple TV, the use of a single phrase in Comcast’s document may seem significant to some, but it’s all about competition, since Amazon and Microsoft were also mentioned. But not Netflix, since Comcast inked a deal with them to provide special access. I’m not surprised.

The real question is just what Apple is working on. Will all roads lead to the TV set that will not be called iTV? Will Apple concentrate on a souped up Apple TV with gaming pretensions, a newly-designed interface, and perhaps integration with some cable or satellite providers? What’s Apple’s magic formula to conquer the living room, and can it all be done with a set-top box, as opposed to the whole widget?

I’d really like to know those answers, and I expect we will soon enough. But not from a confusing phrase in a self-serving FCC document from a cable provider trying to push through a merger.