Problems For Apple TV On The Verizon Horizon?

Feb. 20, 2014 4:57 PM ETAAPL, NFLX, VZ, T, CMCSA, TWX2 Comments
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Investing in stocks or twenty years, undergraduate degrees in Englis and Genetics from the University of Wisconsin. M.A. in Creative writing from University of Wisconsin-Milwaukee. And a Doctor of Chiropractic degree from NCC. Post graduate Certificates in Worker's Compensation (California), rehabilitation and Applied Kinesiology. I have published articles in Chiropractic Journals.

Problems for Apple TV on the Verizon Horizon?

Talking about another unsolved problem for Apple is very sad. To many of the "Apple Faithful" the company's demise continues apace. Since Jobs passed, the iPhone 4s has been the only product worthy of the company he first built and then rebuilt after the "sugar water" salesman drove it to near bankruptcy.

The next big thing was to be Apple TV. Jobs reportedly said jubilantly before he died: "I cracked it". This gave hope to the masses that the cable companies could be bypassed and that a customized internet experience would be available for everyone interested. Everyone who has cable, satellite or phone company TV gets a 1000 or more channels and maybe they watch 5 regularly.

Currently Americans are becoming sadly and slowly aware that, like health care, their internet connections are the slowest and most costly in the developed world. Our health care costs twice as much as French health care that is better and free to the patient. French doctors go to your home at no cost. It is the same with cell, internet and TV services. Even South Korea has a far better internet experience than the United States. You can download a two-hour movie with no problems.

Our cable and internet companies are all monopolies. They have an incentive to keep the politicians out of their monopoly, and provide the worst "acceptable" service so politicians don't hear about it and they max-out their profit.

Netflix has been reporting for years that Comcast, AT&T U-Verse, Verizon FIOS and Time Warner Cable have been slowing their download speeds. Currently a stunning court victory by Verizon that many believe has opened the door to an end for "Net Neutrality" has let to scattered reports of internet download slowdowns throughout Verizon's "territory". I have FIOS and use Apple TV. Prior to the court decision Apple TV worked just fine. Personally I find Apple's decision to keep shows that I buy on their servers reprehensible. When I want to watch I movie or TV show I own I have to again and again download it from Apple's servers. That is workable and worth paying for-as long as the downloads work. Recently it has been just frustrating to use Apple TV. One show downloads slowly but consistently. The next takes 20 minutes to start and then the next pauses right in the middle for no reason other than FIOS is slowing the internet connection.

I thought I was imagining things when the internet connection suddenly slowed after the court decision, but reports about this "phenomenon" are coming from all over about FIOS. Apparently Verizon is experimenting with slowing down connections to see the reaction from consumers. If they get away with it they probably will first ask Apple and Netflix for money to speed up their downloads and then ask the consumer to pay for a higher download rate to receive the downloads. They want to take a bite out of both ends. It is never enough for a monopoly. This strategy can easily be forced on the consumer by slowing download speeds and giving the alternative of downloading the same product at a much higher speed from Verizon or whichever provide controls the pipes.

As it stands now that has made my Apple TV all but unusable. I certainly won't buy anything else from Apple's iTunes and wait 20 minutes for it to begin to download. I can barely watch the shows I already own.

This is clearly a big problem for Apple that they need to address on a National level. The US is not even in the top ten of global download speeds. As of November 2013 it was ranked 31. Now with the monopolies who provide internet service able to slow the internet at will it is likely to get much worse.

Apple has the money and the clout to influence National Policy. It is about time they started looking out for their customers and their share holders. The future of Apple TV is at risk. The dream if the highly anticipated iTV may never become a reality. Possible solutions are to be discussed in the next article.

If the internet monopolies are free to manipulate download speeds, they will become "partner" in any and every product sold on the internet. Hollywood, Apple, Netflix and others ought to be on high alert.

Clearly this has already impacted iTunes. Why buy video from Apple if it will take an unreasonable time to download? People buy movies and TV shows to unwind. If the experience is stressful they will be less inclined to buy. I know I am buying nothing on iTunes until the download situation is resolved.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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