The cable set-top box - a clunky technology from a bygone era that costs many consumers around US$10 (S$14) a month - is headed for an overhaul as the Internet increasingly makes its way into living rooms across the US. But how the set-top box of the future will work - and who will benefit most from the changes to it - remains an open question.
Earlier this year, the Federal Communications Commission (FCC) resolved to "unlock the box", requiring cable companies to give video streaming, programming and encryption data to companies like Google that make standalone alternatives to the traditional cable set-top box. Done right, this could unleash innovation and usher in a new era in which the TV becomes a direct extension of our online world. Unfortunately, the FCC's proposal threatens to replace one set of powerful gatekeepers with a new one: Google.
For years, Google has been jockeying to control the nation's TVs. If, thanks to the FCC, Google succeeds, it will get access to the real prize: the data that flows through these boxes. The company wants that information to help it sell advertising. (Disclosure: I represent companies opposed to Google on other issues in the United States and Europe.) The FCC's proposal would give Google free access to the raw TV programming data it needs to power its search engine for TV. In effect, Google could use the data to become the modern version of the programme guide, connecting users to the TV shows and movies that Google's search algorithms determine are relevant.
It's a simple concept: Turn on the TV, search for what you want to watch, scan the results, and then click on a link to start watching your favourite show or sporting event. But Google is missing a key ingredient for its search-centric TV. It lacks access to providers' proprietary programming information - what shows are available when. Google cannot show a full list of TV programmes in its search results without first entering into licensing agreements with cable companies to obtain that data.
The FCC's proposal would give Google access to live TV listings in its search results - free. Not surprisingly, Google supports the FCC's proposal. But the company has been accused of troubling practices such as biasing its search results, allowing some sites to pay for prominent display in search results and copying the content of others for its own use.
Google is said to have followed the same playbook for years: introducing a free product into a competitive space, subsidising that product with advertising revenue, and then closing off competition through discriminatory and exclusionary practices.
In April 2015, for instance, the European Commission filed formal charges against Google, saying it rigged search results to favour its own content. Similarly, a Federal Trade Commission staff memo from 2012 revealed that Google regularly favours itself even over better alternatives. Last June, Mr Tim Wu, a popular academic and author who coined the term "net neutrality", wrote a paper with Harvard business professor Michael Luca, along with the Yelp Data Science Team, demonstrating how Google favours its own Google Plus local results and reviews over more relevant alternatives.
The FCC must ensure that Google doesn't engage in the same behaviour when users search from their TVs. Absent FCC oversight, the record suggests, Google will favour its own video services in search results just as it does today for shopping, news and other categories.
Google also has a long history of harming content providers. To attract users and advertisers to its services, Google needs content. But it loses ad dollars from additional searches when users click away from its search engine, so it often copies that content - sometimes in small pieces - from third parties.
For example, Google's image search engine displays high-resolution and large-format images from third-party sites, thereby promoting piracy. Google also seems to favour sites that rely on ads rather than subscription fees, a practice that has cut into news outlets' profit margins. These kinds of practices starve content providers of revenue and chill investment in content creation.
Will Google follow the same playbook when it comes to TV? The FCC needs to address this question before moving forward with its proposal.
Google also faces scrutiny from regulators and watchdog groups over accusations of user privacy, bundling of its products, abuse of open-source software and other anti-competitive and discriminatory actions.
If the FCC provides Google with the data it needs to build its search-based set-top, it should take steps to prevent the company from continuing its questionable conduct. At a minimum, the FCC should require Google to commit to search neutrality, transparency, adherence to privacy standards and restrictions on anti-competitive bundling. Without these conditions, a proposal meant to increase innovation may well stifle it.
NEW YORK TIMES
•Jonathan Kanter is an anti-trust lawyer with Cadwalader, Wickersham and Taft.