Regulatory Strategy Now Becoming More Important for Apple, Google, Others

The Texas attorney general's office is conducting an antitrust review of Google Inc.'s core search-engine business, a sign of widening government scrutiny of the Web giant.

The move is one more sign of the growing importance all sorts of regulatory issues now pose for technology companies that historically have not paid much attention to regulators, though Microsoft and Intel long ago became aware of the importance of regulatory affairs.

Texas's top prosecutor has inquired about allegations by several small companies that Google unfairly demoted their rankings in search results or the placement of their advertisements on the search engine, Google said Friday.

But with the increased awareness of regulatory downside has come an awareness that regulatory action can help a company as well.

In April, the Federal Communications Commission invited comments on a proposal that cable and satellite operators let viewers use any "smart video devices" available in stores to connect to their TV service. It says it wants to "foster a competitive retail market" in the devices.

If implemented, it could have far-reaching implications. Among other things, the FCC hopes such a mandate would prompt electronics manufacturers to make devices offering both Internet video and traditional TV services.

That could create a much-bigger opportunity for Apple, Google and other firms as well.

To the extent that the set-top decoder is the physical embodiment of the ability to access applications and services, the new rule would open the door for third-party devices, or integration of new features directly into set-top decoders, in ways not possible up to this point. Where the decoder that now enables multichannel video services also effectively blocks access to Internet video, that could change if the new FCC rules are adopted.

Telcos, cable, mobile and satellite companies long have been acutely aware of the role regulations play in enabling or disabling business models. That is something technology firms only recently have learned.