Pay-TV market thriving — for now

If you’re looking for an alternative to Comcast for pay TV, you’re soon going to have another option.

But how long that option, and others, will survive may be up to federal regulators.

Late last month, YouTube announced it will be entering the pay-TV game. The Googleowned company, best known for hosting free-to-watch videos posted by individual creators or pirated from Hollywood media companies, will soon be offering, for a monthly fee, a collection of broadcast and cable TV channels.

YouTube is only the latest company to offer a pay-TV bundle distributed over the internet. Over the last two years, Dish launched Sling TV; Sony, PlayStation Vue; AT&T, DirecTV Now; and Comcast, Stream TV.

Google’s upcoming pay-TV service won’t be the last internet-based pay-TV service. Hulu has already announced that it too will begin offering a multi-channel pay-TV service later this year. And Apple reportedly has long been eyeing the market.

What’s likely to be troublesome are the channel options. YouTube TV will include Fox News, ESPN and USA, which are three of the most popular cable channels. But it will be lacking lots of others. Among the missing: TBS, HGTV, TNT, the Discovery and History channels, CNN, AMC and Lifetime.

Still, the launch of YouTube TV is something to be excited about, even if its lineup doesn’t match your viewing habits. After years of being stuck with ever pricier television service from a handful of competitors — at best — we now have a growing number of lowerpriced options. If you include not just the multi-channel services, but Netflix, HBO Go and the large number of individual cable channels available online, the market for internet-based TV services appears to be growing and thriving.

But there’s trouble on the horizon.

The business model for these kinds of video services depends on an open internet. Unfortunately, the open internet is very much in question right now, and the big broadband providers — most of which have their own video services that are under threat from the Sling TVs and YouTube TVs of the world — have a strong incentive to see it go away.

If broadband providers could block video services that competed with their own or slow down their streams to the point where they were unwatchable, they could put rivals out of business. If broadband providers were allowed to charge rivals a toll to access the providers’ customers or ensure a fast connection to them, they could make those rival services unprofitable or prohibitively pricey.

Conversely, if broadband providers, many of which limit the amount of data their subscribers can consume in a given month without facing extra charges, can exempt their own internet video services from those data caps while applying them to their rivals, they could give their own services a leg up. If one service eats into your limited data allotment and another, similar service doesn’t, which one are you more likely to use?

Those notions may seem alarmist, but Ajit Pai, the new head of the Federal Communications Commission, has made it clear that he’s no fan of an open internet, at least as it’s commonly understood. He’s already given companies like AT&T and Verizon the green light to exempt their own video services from data caps they apply to their rivals.

So enjoy the new pay-TV competition. Shop around, find a service you like. Just be aware, this era of choice may not last.