This Microsoft Invention Could Finally Destroy the Cable Company Monopoly

For too long we've been held hostage by our local cable companies. Their monopoly-like status has left us chained to spotty service, inexplicable rate hikes and laughable customer service.

But a new product is about to trigger a revolution - or, evolution - that could end the cable company reign.

Today (Tuesday), Microsoft Corp. (Nasdaq: MSFT) revealed its next-gen Xbox, called the Xbox One, a device which may prove capable of replacing your cable box.

The reveal comes in anticipation of the Electronic Entertainment Expo, or E3, a mammoth annual conference in which the world's best and brightest tech companies show off their latest in computers, video games, and related products.

Notable reveals at past E3's include: Sony Corp.'s (NYSE ADR: SNE) PlayStation and its following iterations, Nintendo Co. Ltd.'s (NYSE ADR: NTDOY) Nintendo 64, Gamecube, and Wii consoles, Microsoft's original Xbox and Xbox 360, and a litany of legendary games such as Resident Evil, Final Fantasy VII, Bioshock, and Assassin's Creed.

This year's E3 takes place June 11-13 and is one of the most-anticipated yet.

Along with Microsoft, Sony intends to unveil its new console, and thus, the nerd-drool inducing "console wars" are upon us.

But the new products aren't just for gamers. In fact, as Tuesday's reveal proved, gaming technology continues to improve opportunities for a wide range of consumers.

According to Wedbush's Michael Pachter for Yahoo! Finance, "The real focus of this next generation is on multimedia."

We now know the Xbox One aims to be the pinnacle of multimedia; an all-in-one home entertainment system.

The cloud-powered console hooks into all the devices in your living room and allows you to transition from TV to music to Internet to movies seamlessly by voice command.

Pachter predicts consoles like the Xbox One will become Internet television receivers, and that signals will eventually be able come over the internet instead of dedicated cables and cable boxes.

What does that mean?

It means that the new tech would open up the market to cable providers that are geographically limited to certain territories. Instead of requiring cables to bring you television programming, you could access the programming via the web. Cable providers could offer you different television "packages" over the console that will give consumers more options.

In theory, the days of Comcast Corp. (Nasdaq: CMCSA) or Verizon (NYSE: VZ) - or the most affordable option, nothing - would end. You would have more choices than just a handful of companies' set channel packages and prices.

Everyone would be able to compete with cable provider giants.

Also, consider that we have already seen huge shift of consumers weaning themselves from cable and satellite to instead opt for online television and movie programming.  The success of Hulu and Netflix evidence this migration.

"After having cable or satellite TV and its dozens and later hundreds of channels available anytime I wanted, I thought I'd miss it. But, in fact, I prefer watching TV a la carte online," executive editor Ryan McCaffrey wrote for entertainment website IGN.com.

And in a random twist of fate, U.S. Sen. John McCain, R-AZ, has chosen this month to introduce legislation that could blow up the cable industry.  He states three main objectives in the bill, named the Television Consumer Freedom Act of 2013.  They are:

  • To encourage the wholesale and retail 'unbundling' of programming by distributors and programmers;
  • To establish consequences if broadcasters choose to 'downgrade' their over-the-air service; and
  • To eliminate the sports blackout rule for events held in publicly-financed stadiums.

McCain's bill would effectively force cable and satellite TV providers to grant consumers the option to individually select which channels they receive.  This is yet another vehicle that would grant more choices to consumers and decrease the monopolistic power of the cable providing giants.

Between Xbox's next-gen console technology, and McCain's a la carte channel selection bill, we are looking at a brave new world when it comes to television programming access.

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