It looks like Verizon has taken a leap towards making their FiOS TV service a reality via Xbox LIVE thus sealing the dominance of the Xbox as an Internet TV platform and a major player in the set-top-box market. The Verizon app is expected to hit Xbox LIVE along with the upcoming update to the Internet gaming and entertainment service on December 6.

Comcast will also have an app available, but will most likely only give viewers access to its video-on-demand service, and not its live channels.

But with all this excitement there’s still a twinge of disappointment: the Verizon app lacks the total amount of content it could be launching with. The line up looks solid, but it’s far, far less than a full channel lineup that would catapult Xbox users into the same ionosphere as other cable services.

GigaOM researched this and brought the story about the announcement and the upcoming app.

At an announcement Tuesday, Verizon mentioned 26 channels that they will be bringing to Xbox LIVE including BET, Boomerang (whatever that is), Cartoon Network, Cinemax, CNN, Comedy Central, DIY, ESPNews, Food Network, Hallmark Channel, HBO, HBO 2, HGTV, HLN, MTV, MTV2, Nickelodeon, Nick Jr, Spike, TBS, TCM, TNT, Travel Channel, truTV, TV Land and VH1. As you’ll notice, Verizon has landed a deal with HBO, and as we’ve seen they’re a major holdout to passing along content to Netflix (and other streaming services) meaning that people on Xbox LIVE who use Netflix will probably edge towards the Xbox LIVE cable service to get some of that.

This is disappointing; however, it’s obvious that Verizon here is simply posturing for better deals in the future. Mark Hopkins, entertainment-in-the-cloud overlord (and editor-in-chief) of SiliconANGLE believes that this may yet have a happy ending.

With the addition of Comcast to the feed stock of Xbox LIVE—which also has a stable of channels not part of its launch, such as NBC, USA, and other NBCU properties—this means that Verizon is holding back their content so that they have bigger chips at the bargaining table when it comes time to release them to stay ahead of other operators.

There is no reason why Verizon and Comcast cannot later come to an agreement with Xbox LIVE about licensing prices and then become part of a later roll-out.

After having the largest sales week in Xbox history during the recent Black Friday week, Microsoft has certainly positioned themselves to become the next-big-thing in the living room cloud and personal entertainment. This gives both Verizon and Comcast 1 million more reasons to come to terms with those licensing agreements because there’s a lot of subscribers for them to reach, all of whom they can be certain have big eyes and interest in content.