Apple and Comcast reportedly negotiating streaming TV service deal

Apple and Comcast are negotiating a deal that would bring streaming TV service to a future Apple TV device. What's more, Comcast would give traffic generated by such devices special treatment on its network, according to the Wall Street Journal:

Apple and Comcast aren't close to an agreement, said one person familiar with the talks. Delivering the service quality Apple envisions would require Comcast to make significant investments in network equipment and other back-office technology, according to people familiar with Comcast's thinking.

I have no doubt that Apple and Comcast have talked and probably are talking about how they can work together. I'm also very skeptical of the claim that Comcast would prioritize Apple's traffic from the rest of its network.

Comcast is bound by an agreement with the FCC that actively prohibits it from giving any company preferential network treatment. This was a compromise Comcast agreed to as part of its 2011 acquisition of NBC Universal, and that runs until 2018.

When a Federal Court overturned the FCC's net neutrality rules, Comcast was quick to note that it was still bound by its prior agreement. Now the FCC is working on new rules that it expects to pass muster with the courts.

After months of wrangling, Comcast and streaming video service provider Netflix finally reached an agreement in February that improved streaming video quality for Comcast customers. That arrangement didn't give preferential treatment for Netflix, however.

Instead, that agreement reduced peering bottlenecks between Netflix and Comcast, which skirts around the net neutrality issue. It's plausible that Apple and Comcast may be negotiating some sort of peering arrangement to make sure Apple doesn't run into the same sort of problems that Netflix did, but that doesn't give Apple priority on Comcast's network.

The Wall Street Journal reports that Apple wants to make its content a managed service, similar to how Comcast now works with its own on-demand video, which occupies a separate part of the data traffic that goes over Comcast users' broadband connection.

Anyway, a lot more questions than answers in this Wall Street Journal piece. It also says that Comcast and Apple aren't close to a deal yet, which means that the result of this effort could be a while away from seeing the light of day.

Update: The Information reports that Apple's device combines live TV listings with web video and has "a big focus on gaming," with users able to "watch virtually on their video on demand." Siri integration would be possible through use of other devices like iPhones and iPads. This report pegs it as a separate product, not a new Apple TV.

Peter Cohen