Comcast Hopes to Woo FCC Regulators with Netflix STB Deal

Comcast subscribers will soon be able to switch between Netflix and pay TV without needing to switch inputs.

Comcast and Netflix announced this week the two companies have reached an agreement about putting Netflix apps on Comcast X1 STBs, which will provide “seamless access to the great content offered by both companies.”

Comcast said the apps will become available later this year. By then, Comcast is hoping that 50% of its subscriber base will have the X1 STB.

Comcast is the largest MSO in the States to offer Netflix on its pay TV STBs.

 

Pay TV Providers Offering Netflix

on STBs in US

Comcast (announced)
Dish Network
Verizon
Atlantic Broadband
Charter-TWC (announced)
SuddenLink Communications
Grande Communications

The announcement is an indication of just how important broadband has become for pay TV providers, most of which are also broadband providers in the States.

In the long term, offering more access to Internet-delivered video, whether that be from a competitor like Netflix or through its own streaming initiatives (such as Comcast’s pledge to live stream every single event of the Rio Olympics on its X1 platform), is good for Comcast because it’ll help drive demand for its broadband networks.

Netflix has been lobbying pay TV providers in the States to include its SVoD service on their pay TV STBs since 2012.

Progress has come slowly, and not without challenges. Comcast was one of the most vocal in its opposition to Netflix on STBs, stating outright it had no intention to offer Netflix on its STBs four years ago. The company has since had a change of heart.

 

Tom_Wheeler_FCC

FCC Chairman Tom Wheeler: still smiling through Set-top Box investigations

 

There are a number of outside factors that might have had a hand Comcast’s 180-degree turn. First, there’s the FCC’s recent decision to investigate opening up pay TV STBs.

FCC chairman Tom Wheeler has said he wants to decouple pay TV services from the expensive proprietary set-top boxes that subscribers are forced to lease to access their subscriptions. By striking this deal on its own, Comcast may be hoping to demonstrate to the FCC it doesn’t need regulation on that front.

Then there’s the interconnection fees, which the FCC is also investigating. Netflix and Comcast have exchanged jabs over the fees Comcast and other broadband providers charge to Netflix for carrying its video data over broadband networks.

Its rumored that Netflix’s complaints over Comcast may have swayed Wheeler into shutting down Comcast’s attempt to acquire Time Warner Cable.

Chairman Wheeler has hounded a message of competition to pay TV providers in the States during his tenure. Comcast faces more scrutiny from the FCC because it’s the largest pay TV provider in the States, and also owns one of the largest content companies in the US, NBCUniversal

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