Potential FCC ruling could pave way for Apple Internet TV service

Several weeks I posted on Apple's contentious negotiations with broadcasters about obtaining content for a possible Apple television and complementary Internet TV service. Now the FCC is considering a change in the definition of a "multichannel video programming distributor" that could make it a whole lot easier for Apple to compete against pay TV providers.

While MVPDs to date have been limited to companies like Comcast, DirecTV and Verizon, the commission is mulling whether online companies like Hulu or Netflix could fall under that definition. The importance of being an MVPD is that such firms have the right to be able to distribute certain programming that they would otherwise have to negotiate separate contracts for. The result could be potentially disruptive for the pay TV industry, which is why they are naturally cautioning the FCC to move slowly on its decision.

The ultimate ruling could play a huge factor in what Apple could deliver in addition to a new television set, which is already rumored to be in pilot production. Rather than going to each channel and attempting to negotiate -- or, according to some, bully -- it into a deal for programming, Apple could just offer a slew of channels like any cable provider. It could help spur the growing movement for "cord cutting" -- people using online video services to replace their pay TV subscription.

While those pay TV providers would still be the dominant way consumers get Internet access to access online MVPDs, allowing more competitors could further erode subscribers' willingness to bundle Internet connectivity with TV packages. Needless to say, there will be a lot of lobbying by parties on both sides of the issue before the public comment period ends. The result could make it far easier for Apple to become a major player in the TV industry without even needing to dole out huge amounts of the cash on which the company is sitting.