Protect Content to Speed Broadband Deployment, Baker Says

Sites like fast-growing Hulu that offer TV programs and movies are competing with YouTube and its homegrown videos, Baker said. “We have moved from using the Internet to watch the homemade video of a dancing baby to watching Dancing with the Stars. If consumers are offered more types of the high quality online video content that they want to see, such as acclaimed motion pictures and popular television programs, adoption will increase.”

Baker said the FCC welcomes entertainment industry moves to put increasing amounts of content online, “which can only increase the richness of material available and therefore increase the attractiveness of broadband use to consumers.” But she said the commission also recognizes the challenges posed by still-unsolved digital rights management issues.

“The creators and holders of the rights to video material most desired by consumers will not make it available unless the Internet provides an environment that protects their copyrights and discourages piracy,” Baker said. “One of the challenges of broadband is to protect the rights of the creative community, assuring them that if they place their material on the Internet … they will be compensated for their efforts.” The regulator should examine “technical solutions” to help protect the owners of content from piracy, Baker said. “We must find a way to distinguish between lawful and unlawful content, but in a manner that will not result in unintended consequences.”

Baker said the broadband outreach program with its dozens of staff workshops and commissioner-chaired forums seems to be working. “It’s been really exciting,” she said. “It’s a new way to reach out and it has been very successful.” Baker told us last week that the commission needs to bring in a massive amount of information to do its job in writing the national plan.

Among the lessons the FCC is learning is that content is what gets many to invest in a broadband connection, Baker said. “Our workshops and hearings have established that the majority of application usage today is focused on browsing, communications and entertainment,” she said. “Video is the subject of this conference and it has just exploded over the past few years and continues to grow exponentially.”

Baker cited three main goals of the plan. “We are exploring ways to increase deployment through reducing costs and increasing the supply points of key inputs such as allocation of appropriate amounts and types of spectrum,” she said. “Second, we seek to increase the rates of adoption through targeted programs and the creation of incentives to use broadband. Third, we must facilitate the widest variety of technologically advanced applications through the use of relevant data and devices by establishing appropriate standards.”

Baker also said the FCC will have to pursue several courses at the same time to get more spectrum into the market. Wireless carriers must have enough spectrum to support video on mobile devices, she said. “In the past six years what we've done is put over 400 MHz of spectrum into licensed and unlicensed” use, Baker said. “I think that there’s a lot happening in the industry to build out this spectrum through the auctions that we've had. There’s a lot of innovation going on. What we really need to do is lay the foundation for the next generation of innovation in wireless. What we're going need to do is look at a better secondary market. We're going to look at commercial efficiencies at the FCC. We're going to have to partner with the federal government and jointly come up with some new spectrum for the wireless services.”

FCC members are making every effort to get along with each other, though there will be inevitable disagreements, Baker said in response to a question. “It’s a new commission,” she said. “With Chairman [Julius] Genachowski, one of his very, very top priorities is to make sure that it is a congenial environment. We all are spending time with each other. … We visit with each other every week. … It has been a great environment.” Baker said most of the focus since she has been at the FCC has been on the national broadband plan, but she expects the commission to move forward on such issues as special access and tower siting rules in the near future: “I think you'll see more action as we all get our sea legs under us.”

While a lot of “great projects” are being funded through the Broadband Technology Opportunities Program, Baker differentiated NTIA’s activities from those at the commission as it develops a broadband plan. “They are really stimulus projects,” she said. “They're moving forward with that grant money while we are moving forward with our plan. You know Washington is a logic-free zone.”

ZillionTV CEO Mitch Berman, a second keynoter, said business models for video must change as IPTV takes over more of the market from broadband and cable. Broadband has “democratized video” and “it’s not about channels anymore,” he said. “There’s so much change that’s enveloping us right now,” Berman said. “It affects antiquated, old business models, which many are holding on to. I reckon it to the Titanic as it’s sinking. Many people scramble to the driest part.”

The video “ecosystem” is “out of balance,” Berman said. The industry needs to adapt, he said. “Those who don’t change and don’t adapt to the change and ignore it, hope that it goes away, hope that companies like mine don’t make it, are missing the point,” Berman said. “The consumer is really empowered and technology has now empowered them even further. The question now becomes how do we all work together in a balanced way to bring all kinds of new services. It goes way beyond video. … There’s commerce. There’s personalization. There’s all kinds of great things we can now deliver into the home through that broadband pipe. Video is spurring it, but it’s a lot more powerful than that.”

Jack Waters, chief technology officer for Level 3, said he’s learned a lot about the changing video market by watching his five-year old. “He sits at our Mac in our office,” Waters said. “He can barely spell and yet he watches more video content on our computer than anyone else in our family. … All of the pundits in the room, including me, we probably aren’t the place to look for where demand will be, where demand will happen. It’s going to happen from that next generation down.”

Ryan McIntyre, managing director of the Foundry Group, said the new video market will require companies to be more innovative. “Software is not something traditionally that the incumbents have been very good at,” he said. “No offense to any of the cable people here, but the Comcast DVR user interface is an abomination compared to something like TiVo.” The broadcast model will continue to exist, even as IPTV grows in importance, he said. “For a lot of mass media it’s the most efficient way to deliver the bytes.”

Richard Green, former CEO of CableLabs, said IPTV versus other means of delivering video is not a “zero sum” game. “It opens different kinds of viewing,” he said. “I watch movies on the iPhone and I do that for convenience or I want to catch up on a particular movie. But that same movie presented on a big screen is much more entertaining.” Green said if he had seen Star Wars originally on his iPhone, “I would have missed a lot of it just simply because of the resolution and special effects and so on that really shine on the bigger screen.”

Green said people tend to come back to more traditional methods of video delivery. Green said his own children are nearing 40. “I hate to say it, but their video consumption is pretty much like mine now,” he said. “Even music, things are kind of steering together, while they were quite different when they were younger. … That’s a factor that’s very often overlooked, how users mature and their taste changes.”