FCC Gives TiVo the Go

It's not often that American bureaucracy makes a sensible decision for its citizens. So Wednesday's Federal Communications Commission decision to permit Motley Fool Stock Advisor pick TiVo (Nasdaq: TIVO) to make programs, recorded on one TiVo set, transferable over the Internet to other TiVo sets, is cause for rejoicing. Not only for TiVo shareholders, whose company is now free to innovate and find new ways to serve its customers, but also for the customers themselves and, ultimately, for all of us. Let me explain.

TiVo's idea was this. TiVo Customer A records a broadcast on her TiVo system. Customer A has a brother -- TiVo Customer B -- who somehow missed the show and wants to see it. Since TiVo is wired into the nation's telecommunications system, it should be a relatively simple matter for Customer A to "email" the program to Customer B for Customer B's viewing pleasure.

Problem is, not everyone thinks "simple" is a good thing. The Motion Picture Association of America (MPAA), for instance, worries that Customer A will pay-per-view a copy of the Disney (NYSE: DIS)/Pixar (Nasdaq: PIXR) flick Finding Nemo and email it to 10 million of her closest friends for free -- with neither Disney nor Pixar seeing a dime for the redistributed copies.

And then there's the National Football League. Its concern is that, if Customer A in Atlanta is watching a Ravens game and Customer B is in Baltimore and wants to see the game, Customer A will email the game to Customer B. What's wrong with that? Well, the NFL apparently has a rule that if a local game has not sold out, it cannot be broadcast locally. If not enough people buy Ravens tickets some night, Customer B in Baltimore would ordinarily not be able to flip on Viacom's (NYSE: VIA) CBS and watch the game. The NFL fears that if Customer A can email the game to Customer B, this will ruin the NFL's little OPEC-ish football embargo.

Now, I don't want to belittle the MPAA's concerns, nor those of the NFL. But neither do I think that the profit worries of two industry organizations should be allowed to prevent TiVo from making its customers' lives a little simpler, a little more convenient. TiVo has shown that its ideas are popular with consumers. You can see it in the strong demand for its products among DirecTV (NYSE: DTV) subscribers and in Cox's (NYSE: COX) and Comcast's (Nasdaq: CMCSA) decisions to offer TiVo clones to their own customers. That the FCC is siding with TiVo, with its investors and its customers, is a victory for them. And when the imitators begin to copy whatever it is TiVo comes up with to accomplish its plan -- as they surely will -- this will prove to be a victory for all of us.

Both TiVo and Pixar are among David Gardner's Motley Fool Stock Advisor recommendations. Subscribe for six months without risk to learn more.

Fool contributor Rich Smith owns no shares in any company mentioned in this article.