To get back to fantasy land for a moment, let me describe my ideal cable box. First, I want it to be really fast, so that I don't have to wait a lifetime while it's switching channels, searching for programs, or scrolling up and down the guide. I'd like it to access other sources of content—it should be able to switch between TV and Netflix, my photos, and my music. Physically, it should be so small as to be nearly invisible. And it should be drop-dead simple to use, with an interface that most people would grasp in a few minutes.
I know this sounds too demanding. Actually, though, I have a device in my living room that can do all of these things already: my television. It's not a particularly fancy or expensive TV (it's a Vizio that's nearly two years old), and many other mid-market sets these days match its capabilities—it can access most popular Web services, it can play music and photos, and it has a great, fast user interface. I was able to choose it from among many other competing models. And best of all, I don't have to pay a monthly fee to use it.
Do you see what I'm getting at? I don't need an extra set-top box in my living room, and the only reason I use one is because my TV provider (AT&T uVerse) demands that I rent one to unscramble its content. There's no technical reason why my television (or any of my other devices—like my Xbox, say) couldn't handle this unscrambling duty. But cable companies have fought every effort to let third-party equipment, like television sets, access their content. Over the last decade the Federal Communications Commission pushed a technical standard called CableCARD which was meant to force TV companies to make their programming compatible with standard consumer-electronic devices; the cable industry has shunned that effort, and there are very few CableCARD-enabled devices on the market.
There are some obvious reasons why cable and satellite companies don't want other devices to be able to decode their programming. First, they'd lose all those cable-box rental fees. More importantly, they'd lose a key grip on the living room—by controlling the main entertainment device in most homes, cable companies can slow or stymie any competing sources for entertainment. And TV providers would have to be especially wary of Google's attempt to invade the living room. Google, like the cable companies, makes money from ads—and if it sneaks into your living room through Motorola boxes, it's going to have a great platform for targeting ads to millions of people. If you're watching ads from Google, you're not watching ads from your cable company.
Sure, Google could think of a way to get around the cable firms. For instance, it could start selling souped-up, Internet-enabled Motorola set-top boxes at retail stores—you'd pay a one-time cost of $200 or so and get a device that could unscramble your TV shows and manage the rest of your entertainment (and never have to rent a box from your cable company again). But I suspect that if Motorola did something that dramatic, it'd quickly see its existing, lucrative contracts with cable giants dry up—they'd go with a friendlier set-top-box maker, like Cisco. And I don't know if Google wants that headache. There's already some speculation that Google could get several billion dollars for the Motorola Mobility's set-top-box division if it tried to sell it off after the merger closes. That would provide a much surer payday than taking on the cable companies.
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