Détente In Washington


Cable’s Cold War may be thawing.

For the past several years, the cable industry has been locked in a regulatory war of wills with the federal government — specifically with the Federal Communications Commission. Even more specifically with the agency’s former Republican chairman, Kevin Martin, who became infamous for trying to impose onerous regulation on the industry in the name of consumer protection. A la carte pricing, competitive tests, unbundling of networks were just a few of the issues that incensed cable operators.

Now that the Obama administration’s choice for the chair, Julius Genachowski, has been sworn in, there seems to be a new mood in Washington. In recent weeks, the FCC has taken several actions, however small, that actually reverse actions by the Martin-led commission, and some say reflect a more reasoned approach to regulating.

In late June, the FCC vacated orders for fines against Time Warner Cable and Cox Communications for moving some networks to switched digital video, saying it didn’t violate a plain reading of the rules. Earlier, the agency cleared the way for cable’s use of low-cost digital-to-analog adapters with integrated security functions, giving cable companies another tool in the toolkit as they reclaim analog video spectrum. And it is preparing to advise the National Telecommunications and Information Administration and Rural Utilities Service in doling out more than $7 billion in broadband stimulus money to an industry that could use a boost to bring broadband to the hidden corners of the U.S.

Genachowski has said his FCC will be a transparent agency that makes data-driven policy decisions with consumers in mind, while understanding that private companies are the engines of economic growth. He’s also pledged more user-friendly communications between the commission and the public, and he supports technological rather than ideological solutions to parental content control.

In the final days of the Martin era, as the FCC took questionable swipes at the industry, Congress called for inquiries in to FCC management because of what many perceived as a emphasis on political dealing over hard data and thoughtful analysis. As a new chairman prepares to take over, this is the perfect time to evaluate and overhaul the decision-making practices at the agency. Just as important as the issues the FCC faces today — net neutrality, spectrum scarcity, universal service — is the way the agency makes decisions.

Because this chairman isn’t facing the same issues as the last. The TV world has changed dramatically in just a few years. The focus is less about protecting the viability of plain old video and far more about creating a wealth of opportunities for online business.

Cable wags are fond of saying that anyone would be better than Martin. That may be true. Despite all these positive vibes, though, the cable industry shouldn’t rest easy. By all accounts, Genachowski is a sharp executive with good grasp of technology.

But he will still rely on the intellectual capital of the cable industry’s leaders — and, more importantly, their goodwill toward consumers — to forge policy for the next decade.