Policy

McSlarrow: Don’t Erode Incentives

6/24/2005 8:00 PM Eastern

Washington— In comments partly aimed at TV stations looking for a free ride on cable systems, National Cable & Telecommunications Association president Kyle McSlarrow last Wednesday said cable’s inability to control access to its facilities affects investment and limits consumer choice.

“Every time someone thinks they can just take a slice of bandwidth here, or a slice there — whether it’s dual carriage or multicasting or something else — you reduce the incentives to invest, you pick winners and losers for carriage on a pipe that does not have unlimited bandwidth and you reduce the real freedom of the consumer,” McSlarrow said in a speech to the Media Institute, an industry-funded First Amendment organization.

Broadcasters hope that in pending legislation designed to end the digital-TV transition in a few years, Congress will require cable to carry their multiple digital programming services. McSlarrow said he did not believe broadcasters would be successful.

As Congress prepares to write a new telecommunications law, McSlarrow urged lawmakers to remember that the telecom law passed in 1996 unleashed $100 billion in cable investment because a hospitable regulatory environment greeted deployment of high-speed Internet access, digital video service and digital phone services.

“None of this would have happened without establishing a framework that respected the private nature of our networks and provided the incentives to invest,” he said.

Regarding rules for Internet-protocol video providers, McSlarrow said cable is “willing to compete on whatever level playing field is set by Congress.”

Any revision of telecommunications law would represent a challenge for cable. Phone companies seeking to enter video markets want to eliminate franchise requirements; broadcasters might continue to seek expanded cable-carriage rights; and rural state lawmakers might want to tax cable-modem revenue to subsidize local phone service.

Passing a new law could take a few years, though, due to the complexity of the task and the ability of powerful industries to impede progress.

McSlarrow said Congress should adhere to a few principles, including letting marketplace negotiations prevail over government intervention; reducing economic regulation wherever possible; and requiring all providers to comply with “certain universally recognized social responsibilities” such as 911 emergency calling.

Lastly, he said regulation shouldn’t hinge on a company’s using wires or spectrum. “What matters to consumers, and what should matter to policymakers, is not the technology used to provide services, but the services themselves. Like services should be treated alike.”

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