The talks, which are in their initial stages, could solidify Apple's long-standing intention of providing live and on-demand television streaming using their set-top boxes. The content would remain on Apple's servers and would be streamed using networks used by Comcast's cable services, separate from public internet traffic.
The use of this public internet bandwidth has been the center of controversy after a U.S. District Court threw out the Federal Communications Commission's net neutrality rules. By bypassing the public internet channels, Apple will be able to provide its customers with smooth streaming, and ensure video quality similar to that found on Comcast's cable set-top boxes.
The two companies still have a lot of details to hash out -- Comcast will have to invest in upgrading their network equipment and and other back-office technology, according to people familiar with Comcast's thinking.
Another issue that two companies differ on is how deep a relationship should Apple have with Comcast's customers. Apple would like customers to use Apple IDs to log in to the new services, giving Apple control over customer data. Apple also has asked for a cut of the monthly subscription fees paid by customers. But Comcast would like to continue to control its relationships with its customers and their data.
In order to compete with already-existing cable services, Apple would have acquire TV programming nights from other media companies. Comcast would like to ensure that after these additional costs, the service should not cost more than traditional cable TV services.
The FCC is already in the process of crafting new rules for net neutrality, based on the January judgement. The FCC would like to ensure that Internet providers do not block or slow down traffic for content providers, unless they pay for such services.
[Wall Street Journal]