While federal regulators, Congress, and most of K Street have been focused on Comcast’s massive, $45-billion proposed merger with Time Warner Cable, Comcast has been busy snapping up smaller fare.
In the last four months, Comcast has acquired two new tech companies, PowerCloud Systems and FreeWheel Media, both of which will help the cable giant touch nearly every aspect of how we use broadband Internet in our homes and offices, and especially how we watch video online.
But while Comcast has celebrated its newest acquisitions, its competitors, as well as a handful of consumer interest groups, are bracing themselves for the worst. Comcast, which owns NBC-Universal and is already the biggest pay-TV and broadband provider in the country, will likely use these new technologies to increase its dominance in both the broadband and online video markets.
PowerCloud, which Comcast acquired on Monday, has designed new technology to help people to monitor and control how broadband Internet is consumed in their homes and offices. The company’s consumer-facing app, SkyDog, keeps track of which computers or devices are accessing the Internet, what sites they’re visiting, when, and what their bandwidth use is at different times of day.
FreeWheel, which Comcast acquired in April, is an online advertising company dedicated to placing ads in most of the biggest media conglomerates’ videos and TV shows streamed online.
Both PowerCloud and FreeWheel, while they do very different things, put Comcast in a position to take advantage of two major—and majorly lucrative—trends in the industry. The first is what’s known as the “Internet of Things.” As Internet-connected appliances—like thermostats, lighting systems, refrigerators and coffee makers—begin to proliferate in our homes, PowerCloud’s technology could be used to prioritize certain devices at certain times of day. Meanwhile, FreeWheel could, say, place coffee ads on a coffee maker just when it senses that you’re running low on beans.
The second—and even more immediate—trend is that Americans are in the process of shifting, en masse, from watching shows on their TV sets to watching them a variety of digital devices, like smartphones, tablets, and laptops. Online video consumption grew by 71% in the U.S. between 2012 and 2013, according to Nielsen. FreeWheel, which is among the biggest mobile-advertising firms in the country, is poised to do well in that market, which has grown by 83% since last year, according to eMarketer, a market research firm.
Rival media and cable companies, meanwhile, are worried that Comcast’s acquisitions give an enormously powerful company even more power. For example, FreeWheel’s client base includes most of Comcast’s biggest competitors in the broadcast and pay-TV space, including Viacom, 21st Century Fox, Time Warner, and Walt Disney. Comcast’s rivals worry that it could use FreeWheel to access a host of valuable metrics about its competition, including what demographics are viewing which of their shows, when people are watching, and how much they are being paid for ad placement.
Comcast representatives have brushed aside such concerns. “FreeWheel operates as an independent business and continues to support the needs of its broad customer base of programmers and distributors,” said Rob Holmes, a vice president of advanced advertising at Comcast. “Our goal is to accelerate their business—in fact, they’ve already added new customers this year—so it’s in our best interest to respect client data and ensure FreeWheel maintains its autonomy.”
Media executives, for their part, have mostly remained pretty quiet, griping to reporters only anonymously. Some say they are worried about publicly complaining about Comcast’s recent acquisition because survival in the pay TV space requires working closely with Comcast. After all, Viacom, 21st Century Fox, and all the rest rely on Comcast, which is by far the biggest distribution network in the country, to pay billions in retransmission fees and to deliver networks’ TV content to tens of millions of consumers’ homes.
As for Comcast’s more recent acquisition of PowerCloud, some public interest advocates have expressed concerns about how the company will use that new technology. Comcast has said it’s too early to tell exactly how it will be implemented. A company representative said one plan is to use the technology to give consumers better parental controls, so that parents keep their child from accessing certain digital content. But critics say Comcast could use that technology, as well as strategic pricing, to control how consumers access different content on different devices. The company could, for example, make it easy, convenient and cheap for subscribers to watch certain, Comcast-approved content on all their devices, while making it inconvenient—or simply more expensive—to watch non-Comcast-approved content.
As part of its merger with NBC-Universal in 2011, Comcast promised to abide by now-defunct rules governing “net neutrality”—the notion that a broadband provider must treat all content equally—through 2018. But in today’s policy and technological climate, it’s unclear what that means. In April, the Federal Communications Commission proposed new rules on net neutrality specifying that broadband Internet providers, like Comcast, would be allowed to accept payments to “prioritize” some websites’ content over others, and to stream certain videos faster than others.
- Here's Where All The Strongest Hurricanes Have Hit the U.S. in the Past 50 Years
- 2022 Time100 NEXT: TIME’s List Of Emerging Leaders Who Are Shaping the Future
- Industrial Farming Causes Climate Change. The ‘Slow Food’ Movement Wants to Stop It
- Here Are the 12 New Books You Should Read in October
- Artist Oliver Jeffers Wants to Paint the World Out of a Corner
- A Vibrant North Korean Community in London Finds Its Days Are Numbered
- COVID-19 Vaccines Can Make Periods Longer, Study Says
- Column: What Happened When My Entire Family Came Out