Viacom v. Cable One: A Foreshadowing of Things To Come in The Battle for the Open Web?

So it’s come to this.

We’re all familiar with disputes between cable providers and their content partners – it happens all the time. One party claims the other party is demanding too much in a carriage negotiation, and in retaliation, the offended party pulls the programming in dispute. It might be the programmer who refuses to allow its content to run, or the cable company who refuses to put it on the air. The last big one I recall was between Time Warner and CBS back in the Fall, when many major markets looked to be losing football coverage just as the season was starting.

To be honest I pay little attention to these disputes, just more big old media titans arguing over profits and old business models. Doesn’t affect the Internet, nothing to see here, move along.

Until I read this story, about another dispute between cable companies and content providers, this time Viacom (which owns CBS) and Cable One, a provider of cable television, phone, and Internet service in 19 US states. The impetus for this particular tussle was the same as all the others – Viacom wanted more money to run its shows on Cable One, Cable One balked, and Cable One (or Viacom, hard to say which) pulled Viacom programming. But this dispute is unique: Viacom retaliated by denying all Cable One Internet subscribers access to shows openly available on Viacom websites.

Let me repeat that: Viacom retaliated by blocking paying subscribers of Cable One’s Internet services from using Viacom websites. As far as I can tell, Viacom is identifying Cable One subscribers by their IP addresses, and then blocking those IPs from streaming any Viacom content on the web – despite Viacom’s willingness to stream those same shows to anyone else in the US with Internet access.

Let that sink in for a minute. A US corporation is blocking open Internet calls to the open web because the company providing that access is not paying Viacom enough money for Viacom’s television shows. The old world model of command and control in cable is seeping into the Internet. Ick.

What the fork**?

In one short and deeply insightful post this March, Fred Wilson explained the stultifying effects on innovation caused by the erosion of open access to the web by imagining a pitch between entrepreneurs and VCs in an era where net neutrality is rewritten by incumbents in the media and distribution world. Here’s one example:

Entrepreneur: I plan to launch a service that curates the funniest videos from all across the internet and packages them up in a 30 minute daily video show that people will watch on their phones as they are commuting to work on the subway. It’s called SubHumor.

VC: Well since YouTube, Hulu, and Netflix have paid all the telcos so that their services are free via a sponsored data plan, I am worried that it will hard to get users to watch any videos on their phones that aren’t being served by YouTube, Hulu, or Netflix. We like you and your idea very much, but we are going to have to pass.

If what Viacom and Cable One are doing becomes standard practice, I can imagine such conversations getting even worse. We are all reaping the rewards, value creation, growth, and innovation of an open Internet. Let’s not let these practices stand.

**Maybe it’s time to teach Cable One’s subscribers about Firefox’s Modify Headers plug in….