by Kenneth Corbin

FCC’s ‘relentless regulatory assault’ threatens cable industry

May 17, 2016
GovernmentInternetInternet Service Providers

Former FCC Chair Michael Powell, who now leads cable's top trade group, warns that the commission's actions are creating a two-tier regulatory regime that favors tech firms over broadband providers.

BOSTON — The head of the leading cable trade group feels like the federal government is trying to pick winners and losers.

Michael Powell, president and CEO of NCTA, the organization representing firms like Comcast and Cox in Washington, argues that federal regulators have been pursuing policies that would create a two-tier regulatory regime that favors Internet firms over the telecom providers that deliver broadband and cable access services.

“What I believe is most troubling is an emerging government view that the communication market is bifurcated and should be regulated differently — Internet companies are nurtured and allowed to run free, but network providers are disparagingly labeled ‘gatekeepers’ that should be shackled,” Powell said in a keynote address at NCTA’s annual Internet and TV conference. “The implications of this world view go far beyond how it affects one industry.”

For opponents of a given regulation, framing the debate as a government agency intervening on behalf of a favored industry while adopting a punitive policy toward another is nothing new in the Internet sector — or any other, for that matter (in energy, think coal vs. renewables). That construct has long been an animating force in the fight against strong net neutrality rules, with critics over the years charging that the FCC would be effectively tipping the competitive scales in favor of Web-born firms like Netflix and Facebook at the expense of the ISPs by limiting how they can manage their networks. (A federal appeals court is currently reviewing a challenge to the FCC’s latest Net neutrality rules.)

[ Related: Net neutrality could be on-the-line in Washington court battle ]

Powell, who chaired the Federal Communications Commission during the George W. Bush administration, knows those debates as well as anyone, and he talks of the current regime at the agency in dire terms, somewhat dramatically casting the cable sector as the victim of overzealous regulators.

The goal is to create competitive broadband choices for consumers

“We find ourselves the target of a relentless regulatory assault,” Powell said. “The FCC’s governing mantra has been competition, competition, competition. But from where we sit, that incantation has come to mean one thing: regulation, regulation, regulation. The policy blows we are weathering are not modest regulatory corrections; they have been thundering, tectonic shifts that have crumbled decades of settled law and policy. What has been so distressing is that much of this regulatory ordnance has been launched without provocation. We increasingly are saddled with heavy rules without any compelling evidence of harm to consumers or to competitors.”

[ Related: FCC: 10 percent of Americans still lack access to proper broadband ]

The FCC, as one might expect, sees it differently. Chairman Tom Wheeler — who had Powell’s job leading NCTA in the late 1970s and early 80s — has maintained that there is no effort to tilt the playing field in favor of one industry segment at the expense of another, but that policy initiatives like Net neutrality, regulating wholesale broadband pricing or proposing to compel cable providers to open up their set-top boxes are under consideration (or already in effect) because they are needed consumer protections.

[ Related: Ads mislead over broadband Internet access pricing, regulator warns ]

“Fast, fair and open broadband networks are vital to innovation, job creation and economic growth. The FCC’s proposals follow the simple principle that incumbent network providers should not be able to use their gatekeeper position to unfairly constrain the choices of consumers and the ability of innovators to create,” FCC spokeswoman Kim Hart says in an email.

“Chairman Wheeler has been clear: where competition exists, the commission will protect it. Where sufficient competition does not exist, the commission will work to create it because the future is built on high-speed, competitive broadband choice for both American consumers and businesses.”