POWELL AT NCTA WARNS CABLE NOT TO RISK COMPETITIVE EDGE
CHICAGO -- FCC Chmn. Powell praised cable’s emerging “convergence platform” Tues. but strongly advised industry not to risk its competitive advantage by abusing that position. Making his first industrywide address at NCTA convention here, Powell said cable was “uniquely well positioned” to deliver broadband services to consumers and become “viable competitor” to incumbent local phone companies. He said cable had “all the tools it needs” to succeed, including technology, financing and most favorable regulatory environment it had enjoyed in generation. But he reminded industry that it had long track record of tripping over itself.
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Powell warned cable not to risk its competitive advantage by abusing its power. Specifically, he urged industry not to impede DTV transition. He also advised cable not to use its emerging position as “one of the digital gateways” to deny program access to competitors and consumers. He said that providing “variety and choice and innovation” of broadband and interactive (ITV) services “on commercially reasonable terms will be essential.”
Powell, who somersaulted onto stage after performance by young local gymnasts, also warned cable that it would spur renewed calls for regulation if it “thwarted” consumers with continually rising prices and limited choice. Making fairy tale analogy, he argued that cable, which he said was once “viewed as a toad in the communications industry” despised by regulators, investors and consumers alike, had been transformed into prince through magic of “digital kiss.” “Now I know it’s a tall order,” he said, referring to high expectations for industry: “But it is a challenge worthy of a prince.”
NCTA Pres. Robert Sachs, who reminded cable of its public policy obligations much more gently in Mon. speech, said he took Powell’s message to be: “You control your own destiny.” He said Powell also stressed that while cable had “all the tools and resources to be very successful,” industry executives “always have to be mindful” that they affect lot of people.
One leading consumer advocate in audience took exception to Powell’s speech. Jeffrey Chester, head of new Center for Digital Democracy, called Powell’s fairy tale analogy “a scary nightmare for consumers.” With MSOs boosting rates, “closing access to the Internet,” continuing “unprecedented consolidation” and committing new consumer privacy violations, he charged, FCC chmn. ignored pressing public concerns. “Mr. Powell is out of touch with consumers,” he said. “His speech is Babbittism of the worst sort.”