Google, the most profligate lobbyist of all, drinks the cable biz's milkshake with FCC set-top proposal

When word leaked last week that Google (NASDAQ: GOOG) was showing off in D.C. a set-top that sounded an awful lot like FCC Chairman Tom Wheeler engineered it himself, I found myself asking, how did the cable industry get out-lobbied so badly?

Comcast (NASDAQ: CMCSA) has a reputation for spending more money on K Street than just about any company not pushing missiles or fighter jets. The National Cable Telecommunications Association is run by a highly connected former FCC chairman in Michael Powell. Ironically, Wheeler himself is a former cable lobbyist.

Quietly, however, Google has become the most profligate, influencing spender in Washington. According to the nonprofit group Consumer Watchdog, Google spent $16.83 million on federal lobbying in 2014. That figure edged the $16.8 million spent by Comcast as it was pulling out all the stops in trying to pave road for its ultimately failed attempt to buy Time Warner Cable (NYSE: TWC).

Certainly, when it comes to Wheeler's proposal to open up pay-TV's largely proprietary set-top box domain to third-party manufacturers, it appears as though the biggest company on Earth drank the cable industry's Beltway milkshake.

In announcing his very consumerist-sounding proposal to "unlock" the pay-TV set-top and disrupt a "$20 billion" set-top leasing business that nets operators "$6 billion to $14 billion" annually, Wheeler cited figures taken directly from the other side. The former data was cooked up by Public Knowledge, which based its findings on earlier revenue figures released last year by Sen. Ed Markey of Massachusetts and Sen. Dick Blumenthal of Connecticut, who compiled highly redacted data given to them by the pay-TV companies themselves and somehow came up with precise conclusions.

Even the Future of TV Coalition — the group of pay-TV companies and cable-industry lobbying orgs banded together to fight Wheeler's proposal — thinks Google was in the same room with the FCC Chairman when he rendered his plan.

"How does Google have a box that could possibly comply with the FCC's proposal when an intentionally vague framework of the proposal was announced just two days ago, and when the FCC says there are still numerous technical issues to be addressed?" the coalition asked.

And how could Google do this "when no technical specifics are yet available to the public?" the group added. "Chairman Wheeler's 'fact sheet' says a new 'independent open standards body' will be formed to determine technical specifications for these new devices, a process that could take years. Yet Google already has a working box?"

In the six months between when the  FCC's Downloadable Security Technology Advisory Committee (DSTAC) rendered its CableCard successor proposals back in September, and Wheeler's proposal last week, the pay-TV industry had ample time to spin a pretty compelling counter-narrative.

And certainly, amid a blizzard of meetings with, and ex parte filings sent to, the FCC, operators and orgs like the NCTA and American Cable Association tried.

Why are we having this discussion, they asked, when multiscreen apps open up the pay-TV ecosystem to virtually any Android smartphone, along with myriad OTT devices, including Google Chromecast? Why is this relevant when virtually every top operator is experimenting with IP-based delivery systems that require no set-top at all?

Helping Wheeler announce his proposal during an afternoon press conference last week, a senior FCC official even noted, "The days of needing a set-top box are over."

Of course, that statement begged a few existential questions regarding the day's proposal and subsequent event. But in deciphering decisions by large government agencies, it's often more useful to ask about the "who" rather than the "why."

And in this case, Google, the company with the biggest market cap on the planet, is the who. --Daniel

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