FCC Firing 'Regulatory Ordinance Without Provocation' at Cable, NCTA's Powell Says
NCTA Chairman Michael Powell launched the group's INTX 2016 show and exhibition with a lengthy broadside Monday against the FCC and its regulatory approach. "Most troublesome is an emerging government view that the communications market is bifurcated and should be regulated differently," Powell said. "Internet companies are nurtured and allowed to roam free, but network providers are disparagingly labeled 'gatekeepers' that should be shackled."
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Nearly half of Powell's address was aimed at what he called "regulatory ordinance ... launched without provocation." Powell said. "We increasingly are saddled with heavy rules without any compelling evidence of harm to consumers or competitors."
Practically all pay-TV subscribers "are chained to their set-top boxes because cable and satellite operators have locked up the market," the FCC said in a statement. "Consumers should have more choices for innovative ways to access content on the device or app they prefer, just as they do today when they purchase a cell phone or a modem. A truly competitive marketplace could also drive down costs for consumers who pay monthly rental fees to their cable operators. Chairman Wheeler’s proposal to unlock the box ensures the integrity and security of pay-TV programming as well as their business arrangements with content providers remain fully intact. The only change the FCC is proposing is to allow consumers to have more options for accessing the content they already pay for.”
Comcast CEO Brian Roberts, asked later about Powell's comments and how he would characterize the FCC's regulatory approach, said he has some agreement with the FCC "issue by issue." But more than once Monday, Roberts singled out the agency's proposed set-top box rules as unnecessary because of rapidly changing technology and as dangerous to programmers who would lose some control over their content.
Powell also singled out the set-top NPRM and the business data services order as prime examples of the FCC engaging in a "relentless regulatory assault." The cable industry "find[s] our property confiscated and passed off to new competitors to give them a leg up" despite the health of the competitive marketplace, he said. He also characterized the set-top proposal as unbundling of content and "hand[ing] it to companies who do not have to pay for it, respect the intellectual property rights of it or abide by the same regulatory requirements to protect consumers." Meanwhile, Powell said, pointing to the business data services order, "Even when we are the new competitive entrants, we are marked for rate regulation."
Pointing to FCC Chairman Tom Wheeler's oft-repeated governing mantra of "competition, competition, competition," Powell said "that incantation has come to mean one thing -- 'regulation, regulation, regulation.' The policy blows we are weathering are not modest regulatory corrections. They have been thundering, tectonic shifts that have crumbled decades of settled law and policy."
Beyond the regulatory environment, Powell said the cable industry is changing rapidly due to the wave of recent mergers such as Charter Communications' buy of Time Warner Cable and Bright House Networks and Altice's takeover of Cablevision. "Mergers ... are always bittersweet," he said. "The curtain is coming down on some of the most storied companies in our history." At the same time, Powell said, "Charter emerges as a reinvigorated company and becomes a new industry standard-bearer" while Altice will bring "insights and energy" to the U.S. cable market.
Other major trends the cable industry faces include competition from "formidable new creatures" in the video delivery space, an explosion of content, the growth of TV Everywhere and 1 GB speeds becoming commonplace for cable ISPs, Powell said.