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Apple and Comcast in Talks to Create Priority TV Streaming Service

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As Comcast and Time Warner prepare for a major merger, Apple and Comcast are discussing the joint creation of a streaming television service, The Wall Street Journal reports.

Under the potential deal, Comcast would give the service preferential treatment by allowing it to bypass regular internet congestion. The service would involve Apple's set-top box, Apple TV.

By partnering with the country’s biggest cable provider, Apple TV could be poised to replace the regular cable box of the past half century. According to the Journal, Apple intends to store content in the cloud and allow customers to stream it on demand.

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Apple specifically wants its traffic separated from normal internet traffic over the “last mile” to insure that users have an uninterrupted experience free of lag or buffering times that can occur over the normal web.

The last mile refers to the cable company’s infrastructure that actually connects to people's homes and can become clogged when too many customers in the area attempt to use the bandwidth at once.

Apple TV has been around since 2007 and allows users to stream content from the iTunes Store and services such as Hulu Plus, Netflix and YouTube. But the company has yet to find a way to create a full TV service, like the one provided by Comcast, with application-based functionality as well as on demand and a la carte access that customers have come to expect.

Although the companies both have a strong interest in improving the TV-box experience, the Journal reports that the companies are not close to an agreement. In order to provide the quality of service Apple wants, Comcast will have to hazily invest in infrastructure, sources say.

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Other details to iron out include how the relationship between customers, Apple and Comcast will function. The Journals sources say Apple would like users to login using Apple IDs, control customer data and receive a cut of the service’s monthly subscription fees.

Apple must also acquire TV programming rights. Comcast would need to insure that the cost of those rights don’t make the service more expensive than traditional services, another person told the Journal.

In Apple’s proposed plan, video streams would be treated as a “managed service,” the kind that allows uninterrupted viewing of on-demand cable movies and telephone service. This type of traffic is on a separate, less clogged, portion of the bandwidth pipe that public internet traffic travels on.

Although Apple is asking for its traffic to be separated, it isn’t asking for it to be prioritized, the Journal reports -- a distinction that’s important because of net-neutrality merger conditions from a 2011 merger with NBCUniversal that prevent Comcast from being able to “unreasonably discriminate” in how internet traffic is treated through 2018.

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Benjamin Kabin

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Benjamin Kabin is a Brooklyn-based technology journalist who specializes in security, startups, venture capital and social media.