dslreports logo
 story category
Verizon Cooking Up Broadband-Based FiOS TV

For several years I've noted that Verizon has been interested in offering FiOS TV as a streaming broadband video service to customers outside of the company's traditional fiber to the home, FioS footprint. That project hadn't seen much traction until this week, when Claire Atkinson at the New York Post reported that Verizon continues to hold talks with programmers over just such an offering:

quote:
Verizon is having conversations with major programmers about how to bring its FiOS programming service to a national audience, sources say..."They’ve had exploratory talks about how to become a virtual [multiple-system operator]," one person close to the conversations said. "It’s a question of how to get there." CEO Lowell McAdam and his executive team also needs to figure out which branch of government controls oversight of broadband, sources said.
That underlined bit is the curious portion. It's possible the source isn't quite sure what they're talking about, but that comment seems to suggest that Verizon wants to ensure they've killed the FCC network neutrality rules in court before proceeding with such a project. If so, that may imply that there's something about the over the top service Verizon's crafting they feel could clash with existing FCC neutrality rules.

Granted that's assuming the project ever gets off the ground in the first place. Verizon may be a giant on its own turf, but as an OTA player Verizon would still be seen as a threat by broadcasters, and as such is likely running into the exact same problems that Intel, Google, Apple and countless others have before them: the broadcast industry's license restrictions designed to kill any and all disruptive video services in the cradle.
view:
topics flat nest 
Bob61571
join:2008-08-08
Washington, IL

2 edits

Bob61571

Member

Verizon needs to know because,

they are a "crony capitalist" company that only proceeds when they know which government agency that they have to "work with".

Once that is determined then, it's easier for them to make their plans.

Is it the Federal Communications Commission, or the Federal Trade Commission, or whatever?

Another point: Verizon FiOS theoretically would become an anywhere(in the US) MSO, which means that they would threaten every existing US MSO. Doubt that the rest of the MSO industry would accept such a thing, without a tremendous fight in goverment(federal/state/local) and in the civil courts.
elefante72
join:2010-12-03
East Amherst, NY

elefante72

Member

great

Well if it were passed, most likely it would be al la carte and that would blow up the cable bundling model, so just on that fact it would still be unlikely. Then of course the first reaction by the MSO would be to introduce predatory caps on incumbent broadband as to make it too expensive to be feasible.

They could use their Redbox delivery platform, but again if it's live its dead in my house. TV is only viewed through a DVR and after commercials have been removed. I can see nighttime DVR downloads being valuable here.

It would be funny if they say snapped up Aereo to get OTA, and deliver the rest as typical cable fare.

Hmmm
@verizon.net

Hmmm

Anon

?

Couldnt this just be an IPTV delivery like Uverse? This would free them of QAM channel limitations and maybe even be able to bypass local franchise agreements.
88615298 (banned)
join:2004-07-28
West Tenness

88615298 (banned)

Member

Re: ?

Since when does at&t offer U-verse TV outside of it's territories? Hell I live in an at&t territory and can't get U-verse TV.
TBBroadband
join:2012-10-26
Fremont, OH

TBBroadband to Hmmm

Member

to Hmmm
Actually U-Verse is subject to franchise agreements in many areas. Either they go to the state and pay $X to offer services (Ohio they pay $2,000) or they pay the cities. But many states have ruled IPTV a cable TV service. But it only works as far as the company owning the last mile. Nothing has been said for companies that are NOT owning a last mile- such as DirecTV or DishNetwork. VZ coudl easily ship STBs to the customers and have them plugged into X speed of Internet.
pittpete1
join:2009-06-12

pittpete1

Member

Great idea Lowell

Sure Lowell, i'm sure the cable and pay TV providers will love this idea.
"Go with Verizon FIOS TV and cancel your cable TV"
Comcast, Time Warner and AT/T will be jumping all over this.
Now we know why they stopped pursuing video franchise agreements in FIOS towns with no video.
OwlSaver
OwlSaver
Premium Member
join:2005-01-30
Berwyn, PA

OwlSaver

Premium Member

One potential difference

"Granted that's assuming the project ever gets off the ground in the first place. Verizon may be a giant on its own turf, but as an OTA player Verizon would still be seen as a threat by broadcasters, and as such is likely running into the exact same problems that Intel, Google, Apple and countless others have before them: the broadcast industry's license restrictions designed to kill any and all disruptive video services in the cradle."

One potential difference is that Verizon already has carriage agreements with the content providers. They could use their existing customers plus the new opportunity to make a deal that the content providers can't pass up. It will be interesting to see how this plays out.
TBBroadband
join:2012-10-26
Fremont, OH

TBBroadband

Member

Re: One potential difference

They would still be required to go each broadcaster to extend their contracts. Currently they would only be in those areas VZ services currently.
JPL
Premium Member
join:2007-04-04
Downingtown, PA

JPL

Premium Member

Re: One potential difference

No they wouldn't. That's not how these contracts work. HBO, e.g., doesn't care where Verizon's footprint is. They only care how many customers are exposed to their channel. Think about how stuff like Netflix works, on this front. The companies that Netflix contracts with don't give a rip about where their streaming services are currently serving. The only thing Verizon would need to secure is streaming rights for the channels, which they've been chipping away at, anyway.

In reality, they'll probably roll out a streaming app that's a pared down version of their current channel line up - only including the channels that are currently available for live streaming via FiOS to existing customers.

As for the notion that this will be ala carte (to handle an objection that someone else raised) - no... it won't. One doesn't assume the other. Look, we don't have to speculate on what this will look like (if it comes to pass). Verizon has already showcased it at the CES last year. Picture an app, say on Roku, called FiOS TV. You would subscribe to that app. That app would give you access to television programming through whatever streaming device you have. THAT'S what they're envisioning. They showcased it using a Samsung Blu-Ray player.

As for one of the objections in the main story - comparing this venture to past ventures like Google TV and Apple TV... there's one big difference here. Verizon already has carriage agreements with these content providers. THAT'S the difference. Anyone want to guess why Google is offering TV service through Google Fiber? Because without those contracts, you can have the shiniest piece of hardware on the planet, but it won't make any dent in the traditional tv viewing market. It's all about content. Verizon already has those carriage agreements in place.
TBBroadband
join:2012-10-26
Fremont, OH

TBBroadband

Member

Re: One potential difference

VZ would need carriage agreements in place with certain content providers so you are wrong. They're not going to be able to go to Chicago and pick up the local ABC station and pay nothing for it. that local station will be wanting their $$$ or no TV service. And I'm sure that HBO and others do care how many viewers that VZ would have when it comes down to $$$. That is how they get paid. PER customer.
JPL
Premium Member
join:2007-04-04
Downingtown, PA

JPL

Premium Member

Re: One potential difference

IF they carry locals for a new market, then yes, they would need carriage agreements IF THOSE CHANNELS ARE NOT SPECIFIED AS MUST-CARRY. My point was, for existing channels, they don't have to extend anything. Everytime Verizon moves into a new market with their fiber service, they don't have to renegotiate anything, apart from contracts with local and regional companies.

Next, read what I wrote. I SAID that HBO cares about how many subscribers Verizon has (not sure how you determined that I DIDN'T say that). What they don't care about is WHERE those subscribers are, which was the implication of your original post. In fact, this move by Verizon, rather than concerning content providers, would be something they would embrace. Why? Because of what you said - they get paid per subscriber who has access to that channel. More subscribers... more money.

I just think you're overstating the hurdle that Verizon has in doing this, with regard to contracts. If they wanted to roll out a streaming ap that had nothing but national cable channels in it (forget about locals and regional networks), they already have streaming carriage agreements with some 75+ channels. Create the app... roll it out there... and someone in Chicago would be able to get access to those 75+ channels through that app. All without Verizon having to negotiate an additional contract for anything. I would look for this move, if it happens (a big if), to be very limited in scope at first. Look for it only being available in some markets (again, not because of contract issues, but because they would want to run this as a test bed first, and limiting the market allows them to limit the customer base who would sign up), and only for a few channels. They would want proof of concept first. Very much like what they did with Flex View. When that first rolled out it included only a handful of programs. Now a VAST majority of their paid on demand is done through Flex View.
Crookshanks
join:2008-02-04
Binghamton, NY

Crookshanks

Member

Maybe they just don't like uncertainty....

Would you invest millions (billions?) of dollars into an enterprise without some assurance of what the regulatory environment is going to look like in the years to come?
said by Karl Bode:

but that comment seems to suggest that Verizon wants to ensure they've killed the FCC network neutrality rules in court before proceeding with such a project

quote:
CEO Lowell McAdam and his executive team also needs to figure out which branch of government controls oversight of broadband, sources said.

mixdup
join:2003-06-28
Alpharetta, GA

mixdup

Member

LTE...

Surprised no one sees where this is really heading...offering FiOS via Verizon's LTE network. Sure, they may offer it to anyone who brings their own IP connection, but the real game is to bundle it with LTE broadband on the go and at home.

Why else would they also be trying to gut network neutrality? If this were truly about getting Charter's video customers in Alabama where the ILEC is AT&T, wouldn't they want network neutrality protection? Gutting net neutrality lets them offer truly unlimited bandwidth on this proposed service for their LTE customers but still implement caps for their customers watching Netflix or downloading email.

Marketing it that way also eases the trouble over "disruption" to the existing world of TV. Note that nowhere has any of this said anything about A la carte or netflix style programming. It'd still be package-based linear channels, with the same economics for the programmers.
88615298 (banned)
join:2004-07-28
West Tenness

88615298 (banned)

Member

Re: LTE...

said by mixdup:

Surprised no one sees where this is really heading...offering FiOS via Verizon's LTE network. Sure, they may offer it to anyone who brings their own IP connection, but the real game is to bundle it with LTE broadband on the go and at home.

Wrong. Verizon LTE network is under strain now even with over half their customers dealing with low caps. LTE can't handle video in any meaningful way. Not now maybe not in 10 years or ever.

mixdup
join:2003-06-28
Alpharetta, GA

mixdup

Member

Re: LTE...

so is this your opinion or do you actually have some source that shows they're having issues? I haven't had any problems.

It's a true fact that they are working on bringing fixed LTE broadband for residential consumers, and with multicast and dropping net neutrality, they could easily handle putting a video service on their network.
JPL
Premium Member
join:2007-04-04
Downingtown, PA

JPL to mixdup

Premium Member

to mixdup
Actually... just the opposite. Verizon is trying to decouple the programming delivery from the delivery mechanism. That's the goal here. To decouple FiOS TV from the Fiber. The delivery mechanism won't necessarily be their's. It's not about LTE or any specific type of delivery mechanism. It's about decoupling the delivery of content from the means of delivery. That's all. It's a way of moving into other markets without having to lay down fiber. It's using Comcast, e.g., to deliver FiOS TV to customers.

Not saying that it's without its challenges.

I also dispute the comment in the main story that Verizon is waiting to make sure that net neutrality is dead and buried before moving forward. Ironically, in this venture, net neutrality HELPS them. Comcast, e.g., wouldn't be able to prevent streaming from a FiOS TV ap over their network under net neutrality.

mixdup
join:2003-06-28
Alpharetta, GA

mixdup

Member

Re: LTE...

Except that Verizon is working against net neutrality. Just because you "think" that is what would help them, that's not what their actions suggest. They are actively working to gut net neutrality, which is what leads me to believe they want to push this via their network, whether it's LTE or fiber.

Why would they want to sell this to you and then be content if you are using Charter or AT&T?
JPL
Premium Member
join:2007-04-04
Downingtown, PA

JPL

Premium Member

Re: LTE...

Ugh... Read what I wrote. I said IN THIS INSTANCE net neutrality helps them! Yes, they are trying to kill net neutrality for other reasons. My point is simply this - Karl's point that they have to wait for net neutrality to be dead before moving on this makes no sense. There is no benefit FOR THIS EFFORT for them to wait for such a thing. What does it buy them? Nothing! In fact, ironically, in this case net neutrality actually helps them.

It would seem to me that the opposite of what Karl said is true. IF Verizon is tying the fate of this venture on the fate of net neutrality, it would seem to me that their seeming initial decision to scuttle the effort came about BECAUSE of the death of net neutrality. It also seems to me that the statement by the company that this effort is still alive and well could indicate that too - even though net neutrality is dead, we're still planninig on moving forward with this.

Yes, they want net neutrality to go away becase on balance that's the better position for them.

As for why this means they're going with LTE... I don't get your reasoning. Of COURSE they would rather you use their equipment. But so what? This app would be separated from the equipment! That's the point! How would having this app help them get to the goal of taking over the wireless market? It seems to have escaped notice that, should they develop a wireless app (which is not something I've seen them showcase, to date), couldn't you just as easily run said app on your AT&T wireless phone? Um, yeah, you could.

This whole effort is aimed at widening the FiOS TV customer base without having to run any more fiber. To be a disruptor in markets that FiOS currently doesn't serve. I'm not sure whether it's a viable plan or not - they would have to offer a service, e.g., that local cable companies could not. I'm just not sure there will be a big call for such a service. But time will tell.
JPL

JPL to mixdup

Premium Member

to mixdup
BTW, I see what you're saying - because they really want net neutrality gone... this effort is really about selling LTE. Selling their network. In a way, we're in agreement on one point. I don't see this as being an effort to sell LTE. But it sounds like we both agree that scuttling net neutrality doesn't help this effort. Hence my comment that Karl's statement makes no sense. Why would they have to wait for such a thing for this effort?

Like I said - I do disagree that this is about selling LTE. Of course they want to sell LTE, but I'm not sure how this move ties into that. That's what I don't get about your argument. How does this help them sell LTE? I see this as a disruptor in other markets. I think that's what they're trying to do. They're trying to get customers for their TV service without having to worry about the network. I think that they're doing that because there's alot of money in pay TV. If they can grab even a handful of customers deep in Comcast territory without having to build out more fiber, why wouldn't they?

I know many see LTE as the future for all TV viewing. I don't. Yes, there's alot of bandwidth there. But there's a hell of alot more bandwidth already in place with landline service. What's more, FiOS right now is a cash cow for Verizon. I keep reading conspiracy theories that they want to ditch all their fiber for LTE. I think that's just nonsense. In some markets, that's clearly true. They want to get rid of their underperforming markets. What business in their right mind wouldn't want to do that?

Let's say they do what is being talked about and the go all LTE all the time. What would happen to their TV viewing base? I think it would utterly collapse. A vast majority of TV viewing is still done in the home. Via a land line service. Even stuff that's streamed - a VAST majority of that is streamed in the home, using that same land line service. I can tell you for sure that the day Verizon drops FiOS for TV over LTE for all their customers is the day I find a new provider. No way in hell would I opt to use LTE for my main pipe in the home.
McBane
join:2008-08-22
Wylie, TX

McBane

Member

Dual edged sword

If they want to kill net neutrality whats from stopping the cable companies or other phone companies from de-prioritizing Verizon FiOS TV on other services?

In this case they're actually better off supporting net neutrality to ensure their product works on other ISPs.
Mike Guerra
join:2013-08-12
Cherry Hill, NJ

Mike Guerra

Member

google fiber

Is VZ trying to get in front of google fiber? It seems like a shift in the waaaaay out dated cable tv model is on the horizon.

-Mike Guerra
tmc8080
join:2004-04-24
Brooklyn, NY

tmc8080

Member

four letters too late, who knows how many years

XBMC, look it up...