A new deal will let Verizon Communications Inc. (NYSE: VZ) stream a bunch of video-on-demand (VoD) titles and a limited number of live TV channels to LG Electronics Inc. (London: LGLD; Korea: 6657.KS) 's Smart TVs and Blu-ray players later this year -- all without a set-top box.

Verizon's FiOS TV app for the LG environment will start off with access to 26 live HD channels (ESPNews, Cinemax, HBO, MTV, TNT, TBS and Nickelodeon, among them), along with more than 10,000 VoD titles that the telco currently offers through Flex View, Verizon's TV Everywhere platform. Verizon subscribers will be able to navigate using LG's just-launched Magic Remote, which supports gesture and text input and, for some TV models, voice input. (See Verizon Launches 'Flex View'.)

The content is close to the number of VoD titles and the stripped-down, live TV lineup that FiOS TV is already delivering to Microsoft Corp. (Nasdaq: MSFT)'s broadband-fed Xbox 360 gaming console.

Verizon expects to launch the FiOS TV app on LG TVs and Blu-ray players in the first half of 2012. Verizon also intends to make live TV streaming available on the iPad, but a spokeswoman wouldn't tell us when that capability will be introduced.

Why this matters
Even with just 26 live TV channels, this is an important step toward offering the FiOS TV service without a set-top, a trend that is starting to take hold across the entire pay-TV category.

The partnership also comes into play as the Federal Communications Commission (FCC) decides whether to launch a formal rulemaking proposal for AllVid, a potential successor to the current CableCARD rules. MSOs and other pay-TV service providers have argued that such a mandate is unnecessary, urging the FCC to let the market for retail video devices evolve without more government interference.

For more
Read more about AllVid and pay-TV's recent consumer-electronics plays.

— Jeff Baumgartner, Site Editor, Light Reading Cable