Trying to assess the prospects for independent online video entertainment—video that doesn't come from one of the established outlets—is a day-to-day process. On some days the future looks bright; on others, less so.

On the exciting side, Google just launched an experiment in live broadcasting, including a real time safari in South Africa's Djuma Game Reserve, a cricket match between the Delhi Daredevils and the Mumbai Indians, and a Mortal Kombat tournament. Most of the participants in this beta test look decidedly indie. We'll reserve judgement on how the Wing Girls Answer Your Dating Questions show will work out.

On a less hopeful page of the prospectus, Netflix has announced that it is downgrading the quality of video streaming for Canadian consumers. Mindful of the tight data caps imposed on consumers at Rogers, Shaw, and Bell Canada, the default setting will provide 625Kbps of throughput, Netflix says.

The movie distributor notes that "there is some lessening of picture quality with these new settings," but assures Canadians that the experience will continue to be "great" (albeit less filling, data-wise).

Any snapshot of the online independent video scene suggests an uncertain forecast. We can think of four likely impediments to a full takeoff.

Data caps

Data caps may be indie Internet television's Public Enemy Number One. As we noted in our snapshot survey of the US, Canada, Australia, and the United Kingdom, setting data ceilings is becoming an increasingly popular practice among ISPs. Some charge extra for data when you go over a usage point. Others slow down your broadband speed or throttle certain protocols. Or, rather than caps, they charge on a usage-based (or metered) billing basis.

The good news is that lots of ISPs still don't cap data, like Sky Anytime in the United Kingdom. Or they cap it at very high levels like Comcast (250GB) in the US or o2 in the UK (100GB and 250GB for their best plans).

If capping becomes the norm, broadband subscribers will get jittery about watching Internet TV. Netflix obviously understands this. Think about the electronic entertainment networks of the past, most notably radio, broadcast television, and cable. It's hard to imagine the Golden Age of Radio taking off in the 1930s if consumers had thought that enjoying The Shadow or The Jack Benny Show too much would land them an unexpectedly high bill.

Lack of a clear home theater standard

The Holy Grail for Internet TV is creating a viewing environment in which it looks and feels like the good old home pay/broadcast television that couch potatoes have enjoyed—as opposed to the video that consumers watch on a desktop computer that's often dedicated to workplace activities. Indie producers could flourish in the former scenario.

The Federal Communications Commission is currently running a proceeding to get feedback on just such a standard, called "AllVid." The idea is to require an industry-wide gadget that consumers can plug into both a broadband router and a cable TV jack, after which they could watch online video and pay channels through AllVid-friendly devices, which would combine both platforms.

Google, Best Buy, Mitsubishi, Sony, and TiVo are huge supporters of this idea. Google has already launched its Google TV platform, partnering with the DISH network for pay television content.

The cable industry and Hollywood are far cooler to the proposal. Cable says it is unworkable on a technical and copyright basis, especially when it comes to the metadata contained in program guides. The movie studios object to a platform that would put copyright infringing sites like The Pirate Bay on the same screen as their content (although that's already the case on a platform commonly called the World Wide Web).

Some companies worry that an FCC standard could hamstring their efforts to accomplish the AllVid goal on their own. Samsung cites its Samsung Smart TV, which, in the device maker's own words, "delivers both live linear channels and on-demand content via Internet streaming over a Time Warner Cable subscriber's broadband connection, through the subscriber’s cable modem and home network, to the Samsung product."

The manufacturer recently demonstrated the Smart TV to FCC staff. "During these demonstrations, Samsung urged the Commission not to take any regulatory actions that would preclude or inhibit technological innovations such as those being demonstrated," the company says.

Sure enough, device and standard mandates are extremely difficult to pull off. As was the case with CableCard, they often fail. But it's unclear how Internet TV will become pay TV's equal unless any home theater system can easily access both platforms.

Mergers and acquisitions

As Ars readers know, one of the nation's biggest ISPs recently acquired one of the country's biggest TV networks. The union of Comcast and NBC Universal isn't as dark and dire a prospect as its loudest critics proclaimed. As Congress and the FCC pondered the marriage, the economist Thomas Hazlett noted that the combination would only represent around 12 percent of total cable network revenues.

"This will yield some economies of scale, or so Comcast hopes, but it hardly moves the needle in terms of the concentration of the industry," Hazlett observed.

Still, the needle did move. The Hulu online video service is now part of the Comcast empire, albeit with some FCC/Department of Justice imposed managerial restrictions (Comcast can't "exercise corporate control over or unreasonably withhold programming from Hulu").

And with NBC and the other networks restricting Google TV's access to their programs, the big question is what kind of precedent this merger sets—a question that was posed by former NBC employee, now United States Senator Al Franken during the deliberations.

"If Comcast is allowed to merge with NBC," he warned, "it will not be long before Verizon or AT&T say, 'You know what? We better buy Disney/ABC. We better buy CBS/Viacom.' And what you're going to have is a handful of companies that own all the programming and provide all the Internet service. So a handful of companies will have their hands on all of the information that all of us get. And that is very, very dangerous."

These companies don't even have to buy each other to engage in a wide range of potentially anti-competitive practices—developing partnerships that encourage consumers to watch pay TV rather than streaming independent content over the Internet. That's the gist of Comcast's TV Everywhere model.

That's why the proposed merger of AT&T with T-Mobile is of such significance. The union doesn't just increase the size of AT&T as an ISP. It jumps its scale as an online content provider, which brings us to the question of "specialized" or "managed services."

Priority access

Here's a possible worst case scenario for online video. The big ISPs start launching marketing campaigns with neat names like "Turbo TV Access" or "Fast Track Video." Online video sites will be able to get quicker, smoother access to Comcast, Verizon, or AT&T subscribers, but only if they pay more for the privilege.

The cable and telco ISPs don't make any secret of the fact that they want to go in this direction: "voluntary commercial agreements for the paid provision of certain value-added broadband services," as an AT&T executive favorably characterized the concept in December of 2009.

Obviously if that happens in earnest, video streamers that have the money to pay for faster last mile access will have an enormous advantage over those that don't. Not to worry, AT&T, Verizon, Comcast, and Time Warner Cable could then say to the little guys—give us a percentage of your revenue, or give us a percentage of ownership in your operation, and we'll give you the same fast access for which your competitors are able to pay.

Back in the early days of network broadcasting, the government tried to head off this kind of practice via its Financial Interest and Syndication Rules ("Fin Syn" as they were called). These provisions limited the extent to which the three big networks could directly own prime time programming.

The Fin Syn rules have been mostly abandoned, however. Franken reminded NBC of the consequences of that decision in a hearing on the Comcast/NBCU merger. "Today, if an independent producer wants to get its own show on NBC's schedule, on any network's schedule, it is routine practice, and you guys know it, for the network to demand at least part ownership of the show," Franken observed.

The FCC has carriages rules restricting this sort of behavior between cable providers and channels. The issue came up in the great Comcast v. NFL Network carriage war. But it's unclear whether these rules would apply to online video sites and ISPs.

Meanwhile the Commission's new net neutrality rules (which have yet to be even be formally released) are a bit vague about the question. For landline ISPs, they bar "unreasonable discrimination" against lawful content. And they suggest that "paid prioritization" will probably run afoul of this provision.

These sort of deals could do "great harm to innovation and investment in and on the Internet," the agency's Order warns. "Even open Internet skeptics acknowledge that pay for priority may disadvantage non-commercial uses of the network, which are typically less able to pay for priority, and for which the Internet is a uniquely important platform."

But the decision also includes a carve-out for "specialized services," defined as "some broadband providers' existing facilities-based VoIP and Internet Protocol-video offerings."

These kind of offerings "may drive additional private investment in broadband networks and provide end users valued services, supplementing the benefits of the open Internet," the Order explains. "At the same time, specialized services may raise concerns regarding bypassing open Internet protections, supplanting the open Internet, and enabling anticompetitive conduct."

Thus, the agency promises to "closely monitor and proceed incrementally with respect to specialized services, rather than adopting policies specific to such services at this time." This close monitoring would only apply to landline broadband, of course. Wireless is exempted from the unreasonable discrimination clause.

Bottom line: until the FCC formally releases its open Internet rules, it's unclear how any of these concerns will actually be regulated, especially since the government will have to defend the provisions in court.

Rocky road

There's a lot of robust content out there in live and programmed indie-videoland: sports, concerts, talk, and (dare we mention it), porn. There are also plenty of roadblocks to its growth: data caps, uneven access to the home theater, a potentially oligopolistic landscape, and the ease with which ISPs can pick winners and losers.

It would be a shame if we let these barriers stymie non-ISP affiliated online TV. But it wouldn't be the first time that something like that happened to independent electronic media. The annals of radio and broadcast television are replete with examples of these lost opportunities. The next five years will determine whether history repeats itself on the video enabled 'Net.