Google-Motorola Mobility Hasn’t Changed AllVid Fans and Foes’ Stances
Google’s recent accord to buy Motorola Mobility hasn’t changed the stances of fans and foes of the AllVid rules the FCC is seeking. The $12.5 billion purchase plan could represent a type of integration achieved by acquisition that some hope AllVid rules will spur widely in the consumer electronics and multichannel video programming distributor industries, executives on both sides of the debate acknowledged in interviews. They contend the deal doesn’t alter the equation for whether regulation is or isn’t needed -- because of what’s happening in the rest of the CE-MVPD market. That might change much later though if Google keeps Motorola’s set-top business or if the two companies are run by the same managers, executives on both sides of AllVid said.
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For proponents of standards for MVPDs to connect to CE equipment without CableCARDs, Google-Motorola Mobility doesn’t lessen the need for regulation. Integration of Internet, cable and TV content isn’t as widespread as they want. For foes of the FCC’s proposal, what they see as the growth of CE-MVPD integration is reason for Washington to leave the market alone. The commission’s proceeding had already effectively been put on hiatus. Executives at AllVid proponent CEA and at rule opponent NCTA declined to comment.
"From our position, nothing has changed” about the perceived need for AllVid rules because of Google-Motorola Mobility, said CableLabs CEO Paul Liao. “There was no need, and there is still no need.” Because the companies have stated each of their businesses will be run separately after the transaction, “I don’t see that this acquisition has any relevance” to AllVid, Liao said. “If they would combine, then it would be another story. And actually I'm kind of hoping from an R&D perspective that the innovation that resides in Google will benefit the set-top box and cable operations” of Motorola, he added: “It’s hard to imagine why the FCC would want to go forward” by promulgating rules, “given the fact that there’s been so much innovation.”
Not so, said Vice President Robin Wilson of Nagravision, a member of a coalition of companies that included Google and has sought AllVid rules. Google seems to be buying Motorola Mobility for its patents, and so “what happens to the rest of Motorola is entirely unknown” when it comes to AllVid, he said. “It would only be a relevant debate if we assume that Google hangs onto all the assets it bought with Motorola,” which he noted also includes compression encoders and cable headend equipment. There are many more steps that would have to play out “before we even begin to talk about AllVid” in terms of the deal’s impact on it, Wilson said.
Some comments to the FCC that CE-MVPD integration is here are “drivel,” Wilson said. “People need to check their facts before they claim all of these things are happening,” as some of the products demonstrated at NCTA’s cable show in June may not be widely available for many years, if ever. Joining TV sets with over-the-top Internet video content and cable programming is happening, Liao responded. “The technology’s all there -- the products are ready to go.” If integration isn’t as far along as some hoped, it’s because “there are rights issues” for content, he said. “Companies like Time Warner Cable and Cablevision are already delivering a good portion of their linear content to, for example, the iPad.” Based on how quickly rights issues are “settled, that will happen” for more programming, Liao noted.
Some cable executives meanwhile keep up hopes that Google hangs onto Motorola Mobility’s set-top business after the deal. They continue to say the combined company may offer a wider and more advanced array of products than Motorola has been selling (CD Aug 18 p1). Spokeswomen for the combining companies had no comment.
Motorola executives have told cable operators that the deal won’t affect anything about the set-top business for now, and that the company and Google will be run separately after the combination is completed. “They reassured us at least for the time being that it’s business as usual,” said Vice President Dennis Steiger of Shaw Communications. Motorola is the No. 1 Canadian MVPD’s main set-top supplier, Shaw executives said. “We think the technology that Motorola has fits in very nicely with what Google is trying to do” with its Google TV product and online services, Steiger said. “I personally would be very surprised if there was any move to separate the set-top box business."
Others have a different view. “I will be frankly surprised if we see Google as a manufacturer of set-top boxes,” said Senior Vice President Tom Simmons of Midcontinent Communications. “I just don’t know that that’s what they really do,” said Simmons. Midcontinent, with about 300,000 video subscribers in the western U.S., buys boxes from Motorola and Pace. Simmons hopes to get out of the business of deploying them, and said new video devices may supplant their need. “We don’t relish the idea of being in the equipment business,” he said. “It’s not what we do best. Taking the longer view of this, I'm not sure why [Google] would really want to be in that business."
Changing technology means Midcontinent won’t “necessarily be deploying our services in the same way and necessarily with the same vendors as we do today,” Simmons said. Shaw is another example of that, using Arris for home gateways that eliminate the need for a separate set-top and serve as communications hubs for homes with multiple DVRs. For such homes, the gateways eventually will be “supplanting set-tops,” Steiger said. “There are many homes where a set-top would make a lot more sense, and we're going to continue to develop the set-top environment as well,” he continued. “We just know that both of those will be very important to us in the future.”