FCC Chairman Wheeler Calls Cable Critiques Standard Lobbying Campaign
BOSTON -- Cable industry criticisms of the FCC on the set-top box, special access and broadband privacy proceedings are lobbying as usual, Chairman Tom Wheeler told a closing-day crowd Wednesday at INTX 2016. Pointing to comments NCTA President Michael Powell made Monday about the cable industry being under a "relentless regulatory assault" (see 1605160033), Wheeler said, "The way in which lobbying campaigns tend to work these days, is first you set up a scenario of 'there's too much being done, we are being persecuted,' then you talk about what I call 'imaginary horribles.'"
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The cable industry has to do more than just rail against proposals, Wheeler said. "It's incumbent on both the regulator and the regulated to deal with finding solutions, not just slogans," he said. As for those particularly contentious issues, such as set-tops and special access, "We are in a make-or-break point where there's a choice -- are you going to say 'no' and do everything possible or are you going to say, 'How do we make this work for consumers in a way we can live with?'" The set-top NPRM was designed to elicit the latter, he said: "You put out an idea, people react to the idea, neither one of those is a finished product."
But the industry is convinced the FCC already made up its mind about set-tops, and its rhetoric matches the dangers encoded in the agency's proposal, American Cable Association President Matt Polka said after Wheeler spoke. "We are not making this stuff up," he said. "We are not making up arguments just to be argumentative. We have a great frustration because we don't believe the commission is listening." Citing comments by Commissioner Mike O'Rielly Tuesday at INTX that it's likely that the set-top item to be presented to commissioners already has been written (see 1605170025), Polka said, "It's not going to change. That's not really working together. That's not taking into account the concerns our industry respectfully brought to the commission."
"It is clear that there is no love lost between FCC Chair Tom Wheeler and cable," Wells Fargo analyst Marci Ryvicker said in a note to investors Wednesday. "It doesn't really matter what issue was brought up -- Set Top Box, Business Data Services, Title II (the decision from the D.C. Circuit Court is now expected to come out Friday -- consensus is that wireline will be included and that it will go to the Supreme Court, which unfortunately only has 8 justices at the moment) -- it's all bad, and inconsistent in our view. This FCC was characterized as anti-business and anti-investment; and the only hope may be that Wheeler steps down when his term is up -- regardless of the result of the presidential election. [Comcast CEO] Brian Roberts summed it up best: 'We hope we get to a point where we can at least be part of the conversation. And we hope that there will be things that we can live with. If we can't, we will find our way in court.'"
Wheeler painted Powell's comments as what he would have done when he was NCTA president 1979 to 1984. "If anybody understands the reality of the job like Michael's, I do," Wheeler said. "I'm now on the other side, receiving this, and say, 'OK, Wheeler, turnabout is fair play.' You also understand what is going on."
Wheeler also spent much of his talk discussing his regulatory philosophy, which he said developed from his eight years at NCTA. "It takes you back to those basic concepts that I developed at NCTA -- it should be all about government promoting competition and stepping out of the way when there is competition," he said.
The video industry -- given the explosion of content and alternative pathways and the increased moves toward smaller bundles -- is potentially "entering the best era ever for consumers, for programmers and for those who deliver [content]," Wheeler said. Whether those new distribution means need FCC regulation and scrutiny, "that's very much in the hands of the industry," Wheeler said. "The job of the government is to encourage competition because competition is a lot better than regulation." The industry is seeing new competitive pushes through AT&T/DirecTV (see 1507280043) and New Charter (see 1605100050) broadband-related conditions, as well as through the apps that are in many cases replacing set-tops, Wheeler said. He also said that through apps and an open Internet, "all of a sudden you don't have to exist just in your franchise area. You can be delivering that kind of service in new and innovative bundles across the country."
While some commissioners have talked about procedure reforms at the agency (see 1605150004), Wheeler said he has "become a traditionalist. ... There are a lot of good reasons why the procedures of the commission are as they are and have been for decades." It's worthwhile to explore new procedural ideas, he said, but "the question is, is there a necessity to change that which for the last multiple decades has been operating pretty successfully?"