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On eve of INTX, NCTA’s chief makes his case against Title II, set-top rules 5/16/2016 8:00 AM Eastern
NCTA president and CEO Michael Powell in his Washington, D.C., office.
(Photo by John Eggerton)
TakeAway

John Eggerton's full-length interview with NCTA chief Michael Powell, excerpted in the May 16 issue of 'Multichannel News'

WASHINGTON — National Cable & Telecommunications Association president and CEO Michael Powell, a genial man with a ready grin, is having a hard time smiling these days.

 

Echoing his constituents in the field, he says the cable industry is being railroaded into regulations that will severely hamper the industry’s future, and the issues are far from trivial: Title II reclassification of cable operators, broadband privacy regulations and “unlocking” the cable set-top box to allow giant rivals into the business.

 

The Federal Communications Commission is empowered to regulate in the public interest, convenience and necessity, but Powell — himself a former FCC member and chairman under President George W. Bush — suggests there is a problem with the way the current agency interprets the “convenience” element. The FCC, he says, is layering on new regulations when it is convenient for edge providers like Google. Powell says restraint is a regulatory tool, and one current FCC chairman Tom Wheeler appears not to be including in the tool kit at his disposal to ensure fair play in the broadband marketplace.

 

The issue that really gets under his skin is the FCC’s set-top proposal, or what Powell labels a “nonsensical,” backward-looking vision of video. Wheeler is creating a market for cable boxes at a time when many consumers would like to see set-tops eliminated completely, Powell contends.

 

The bigger concern surrounds network neutrality and a cable operator’s right to run a broadband business — complex issues that, in Powell’s view, have been hijacked by giant Internet rivals with simplistic slogans. He is looking to derail the notion that edge providers are the Internet’s engine and that ISPs simply provide the railroad tracks.

 

As the cable industry prepared to head to Boston for this week’s INTX: The Internet & Television Expo, Powell sat down with Multichannel News Washington bureau chief John Eggerton to talk about those issues and others. An edited excerpt follows.

 

READ MORE: Powell's Keynote in the INTX 2016 Opening Session | Get more #INTX2016 News

 

MCN: What is wrong with the way the FCC has addressed cable broadband privacy?

Michael Powell: You break the house [by reclassifying broadband Internet access as an information service under Title II of the Communications Act], and then you say you need to fix it.

 

Part of what is troubling is if they move forward on this — because they feel they have to, having disenfranchised the Federal Trade Commission of its authority over privacy — authority under which these companies for decades have operated without any evidentiary record of privacy violations or proof of demonstrated harms.

 

So, why there is a need for an old-style telecom approach to CPNI [Customer Proprietary Network Information] in this context is certainly not clear from any kind of record and practice. But that is not really the issue. … What continues to frustrate me is a government that continues to make its regulatory judgments quite conveniently depending on who they apply to.

 

MCN: For example?

MP: It is a little much for me to see, in the set-top box proposal, the commission seeming to be perfectly comfortable with general state law regulation and Federal Trade Commission regulation of third-party set-top manufacturers — and, let’s be honest, that means big tech companies like Google and TiVo being able to deliver a multichannel video experience — and [those companies] not [having] to comply with the privacy requirements that all other video providers have to comply with. No matter what you believe philosophically or ideologically about these issues, we should all believe in coherence and consistency.

 

I can’t understand why — if this is so critical to the consumer, and [it’s] so essential that the consumer be protected, and, as the chairman says, the consumer owns the data — why is that logic not equally compelling when they use the products and services of companies who, by the way, have a dramatically higher demonstrated pattern of collecting, using and monetizing private data?

 

In fact, one would argue that’s the very central core of the enormous profitability of those enterprises, and yet that’s seen, dismissively, as untroubling where there is evidence of problems — and in an area that involves us, where there’s no evidence of problems, somehow we need this heavy-handed regime.

 

My only request of the government is that you have a holistic, sensible view about these issues that apply commonly. In fact, [the Obama administration] numerous times has said the same thing. When the White House put out its privacy report, they expressly stated that the goal should be to create a harmonious privacy regime so that the consumer is not confused.

 

How do you expect your neighbor to sit down at a computer and decide to go look at things on Facebook and understand the difference between the ISP who might collect data subject to your opt-in requirements [in the CPNI proposal], but the activity that you are engaged in on Facebook is not?

 

To the consumer, I think that’s a seamless, unbifurcated experience and if [consumers] are upset about their privacy, then they are upset about whoever is collecting [their data].

 

The last point I would make is that one of the biggest arguments made by the commission, as well as other government officials and academics now, is the amount of data collection that goes on in society today.

 

But for consumers, it is OK, or mostly OK, is because it’s a tradeoff, right? Consumers get enormous benefit by having their experience tailored to their desires and wishes because of data.

 

MCN: Do you think the chairman can’t similarly regulate the edge or he just won’t?

MP: Let me put it this way: To some degree he can’t, to some degree he won’t. He doesn’t seem to show any inclination. It’s been a commission that has been awfully aggressive and creative with its jurisdiction when it wants to be.

 

It is a commission that argued that it has sweeping authority under Section 706, under some virtuous circle theory of what makes broadband hum, that arguably is broad enough to include edge providers.

 

So, it seems to me that given this commission’s pattern of being pretty aggressive with ambiguity about its jurisdiction when it chooses to … but remember, regulatory wisdom is not only what you do, but what you elect not to do.

 

MCN: Is that why you recommended using the Federal Trade Commission’s regulatory model?

MP: The reason ISPs provided proposals to adopt an FTC-like regime was not to avoid the need to regulate privacy, it was to urge the commission to regulate privacy in the manner being done e

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