How the FCC's moves could give Apple TV a new lease on life

Apple might get an assist from the government in the "battle for Input 1."

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TV is a big part of my life. Maybe that’s not exactly healthy, but it’s true. In part that’s because I spend a lot of time talking and podcasting about TV shows, but also because it’s one way that my brain unwinds after a long day of trying to arrange words in the correct order.

The newest Apple TV has been a pretty significant part of my TV-watching equation since its release, even when I’ve found it somewhat underwhelming, and a recent move from a government agency may let platforms from Apple, Amazon, Microsoft, and more become an even more central part of the TV-watching experience—in turn potentially opening up an entirely new chapter in television’s history.

That move came from the Federal Communications Commission, which last week approved a proposal that would open up the previously locked-down market for set-top devices. You know, those black boxes that you have to use to get TV from your cable or satellite provider. Under the new rules, other companies would be able to easily build set-top boxes, finally bringing a little more competition to the historically closed market. And Apple stands poised to take full advantage of the fact.

Captive audience

According to the FCC, 99 percent of people who subscribe to TV service lease their set-top boxes from their cable or satellite company, paying an average of $231 every year for the privilege. And as the FCC points out, those prices seem to keep going up even while other technological devices’ costs are going down. What a shocker.

TV providers have only recently begun to feel pressure from other corners, namely cord-cutters who prefer to get their content from online services like Netflix, Hulu, and Amazon. But those services all come with their own restrictions, most of them enforced by the content providers—the networks and studios—who, like the cable and satellite operators, don’t want to see their existing business model eroded.

Like cell phone operators, cable and satellite companies fear a future where they are merely dumb pipes shuttling bits from one destination to another—a low-margin business. They’d much rather be able to add their own services, with their own fees naturally, on top of that business, and thus rake in a tidy profit. And until now, they’ve had their customers in a vise.

The battle for Input 1

It might sound like a sci-fi action movie, but it isn’t. Set-top boxes like the Apple TV and Fire TV have always faced one particular challenge: being relegated to the second input.

When I was growing up, we had our TV (broadcast only) and had to flip to channel 3 to watch videotapes on our VCR. It wasn’t until much later that our house had a TV with AV inputs…and my parents still haven’t upgraded their main TV to something with HDMI connections. But in every case live TV continued to occupy the de facto primary spot, putting boxes from Apple, Amazon, and others in the same unenviable position as DVD/Blu-ray players and game consoles.

Okay, it might not seem like a tremendous ordeal to have to switch inputs, but there is most definitely a mental cost with the idea of having to switch remotes, navigate a service, find what you’re looking to watch, and so on. Be honest: how many times have you found yourself watching, on live TV, a movie that you own but are simply too lazy to go and get the disc, or locate your digital copy—even though doing so would let you avoid all the TV edits and commercials?

Yep. That inertia is exactly what the cable companies are counting on.

Rules are as rules do

So what does the FCC’s move actually change? Well, the agency isn’t laying out standards or anything like that. Instead, it’s providing what it calls a “framework” that would let consumers access the television programming they’ve paid for using the hardware and software of their choice.

In other words, it’s possible that Apple could, for example, provide an Apple TV into which consumers could plug their cable connection and then watch the live TV they pay for via Apple’s interface instead of, say, Comcast’s or Verizon’s. Rather than having to switch between different devices on a TV, it would be as simple as switching apps—something we’ve all gotten pretty good at doing. In the end, whatever set-top box you chose could end up being the only hardware you’d actually have to use.

This isn’t a done deal yet, of course. While the FCC’s notice opens the door for this possibility, it still has to be commented upon, finalized, and voted on again—such is the way of government regulation. But it seems clear that that TV industry as we know it is in a period of rapid change, and given all the groundwork laid by technology companies like Apple, they’re in a good position to pick up the pieces.

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