with Michael Powell, President & CEO of the National Cable & Telecommunications Association
When we caught up with Michael Powell, NCTA president and CEO at his Washington, D.C., office, it was a typically active day. His organization had just filed a lawsuit against the Federal Communications Commission in an effort to repeal the group's just-passed net neutrality regulation of Internet service providers. It was reported minutes later that the U.S. Department of Justice was about to nix the merger of Powell's biggest constituents, Comcast and Time Warner Cable. And the NCTA's annual trade show, rebranded as INTX this year, was less than three weeks from kickoff. FierceCable Editor Daniel Frankel chatted with the former Republican FCC chairman and got his take on some of these issues.
FierceCable: The big cable CEOs don't like the FCC's new Title II-based regs, but they also say the rules aren't really impactful to their businesses. With the latter in mind, why is the NCTA suing the FCC?
Michael Powell: Those CEOs have to speak to public markets, but I can tell you that the NCTA is taking a position that is directly reflective of their position. You have an industry that has invested hundreds of millions of dollars based on the promise of the government that it will be regulated a certain way. You've made decisions about your costs, your technology, your strategy, all under the premise that you don't operate in a heavily regulated market that may limit your profits.
FierceCable: What specifically about these new rules is the cable industry concerned about?
Powell: This country, 20 years ago at the birth of the commercial Internet, made a very concerted national commitment to have policy where innovators, entrepreneurs and engineers could operate in the free market. That was the central way in which the Internet would be governed. The fundamental action by the FCC reverses that policy to let attorneys and bureaucrats have much more of a say as to how the Internet evolves. It creates a legal regimen that allows an infinite number of complaints and second-guessing of business decisions.
FierceCable: Can you cite a specific example of a misuse you see occurring?
Powell: Here's one specific. If a company introduces a new rate plan, or changes the way it does pricing, virtually anyone can file a complaint to the FCC, saying these changes are unreasonable. And we can spend a year arguing if that's true. And even if we win, we've spent a year and countless amounts of money.
FierceCable: How did it come to this?
Powell: There's probably a book we could write on this. A huge element that led to this decision was a well-orchestrated, dynamic movement, launched, housed and managed on the Internet, that created a myth that something was happening that wasn't actually happening. You can go look at all the materials from Free Press and others who said the cable industry is in the middle of setting up tolls on the Internet. But there is no justification that we were ever doing any of things we were alleged. In Mark Cuban's words, this is nothing but big-company bashing--the idea that cable is full of these evil corporate entities who are thinking of ways to screw you over. I think that got a lot of public traction, and I think it became partisan. Then irreversibly so when the President dramatically announced his opinion in a way that has ever been done before. I think the FCC was put in an unenviable position by politics that they responded to.
FierceCable: Why is the cable industry so unpopular right now?
Powell: That's an interesting question. A lot of Americans say they hate Congress, but they like their congressman. The cable industry is made up of a lot of mid-sized and smaller companies, many of them with good customer relations. We come into your house and do the difficult work of running wires and drilling holes. And unlike Google, we have to send you a bill--a bill to pay for the broadband infrastructure that Google and others profit handsomely from, but don't support directly. Yes, they have ways they support the network, too, but they don't have to directly bill their customer for tripling and quadrupling speeds. A lot of those fantastic companies that don't have to bill you may be selling your identity up, down and sideways, which we may come to regret. But Google has an 80 percent approval rating.
FierceCable: Sure, but these are big companies…
Powell: Many of these tech companies are dramatically bigger than us. Comcast and Time Warner Cable pale in size when compared to Google, Facebook and Amazon. These are not multinationals. They're domestic American companies. In fact, there not even national companies--Comcast doesn't serve every customer in the United States ... We're called 'the gatekeepers' when companies that control 90 percent of the search market are not. I think this is misguided in ways that don't lead to constructive outcomes, but rather bad policy outcomes like net neutrality.
FierceCable: But cable companies like Comcast control a powerful D.C. lobby.
Powell: Google has more lobbyists than we do. I know this because their Washington shop is upstairs. This notion that we're a big industry using our lobbying power to control Washington is about as far from the truth as you can get. Google has been to the White House 120 times. I haven't been to the White House once in the last four years.
FierceCable: So what does "INTX" say that "Cable Show" did not?
Powell: When you say 'cable industry,' it conjures images from the 1980s. But that's not an accurate impression of what this industry is all about and what it's doing. We're a critical provider of the entire Internet platform our whole information age depends on. We provide what makes it possible for the fortunes of Google, Snapchat, Facebook to be made.
When you set a Nest thermostat or turn on a Samsung smart TV, that's made possible by the virtue of the cable a company put in your home. We have a rightful place at the information-age table, and we're doing a darn good job at it. Our members are as cutting-edge on over-the-top distribution as anybody, so why should be have a trade show that showcases that? Why shouldn't we have a show with a broader scope? We have members who aren't in the cable industry, but have a vested interest in our transformation. Why shouldn't a Vimeo be at the show, or a YouTube, or a company like Charlie Ergen's Sling TV? This show should showcase the latest innovations in the Internet and television, and this is where the two come together. That's who we are.