NCTA’s Powell Says He’s Untroubled By Cable Industry Antitrust Investigations
The cable industry isn’t trying to thwart the growth of online video services, said NCTA CEO Michael Powell during a media briefing at the association’s headquarters Tuesday. The Justice Department has been examining whether or not the industry is discriminating against online media providers. The Justice Department and FCC are also looking into the extent to which Comcast has been complying with or violating the terms of its DOJ consent decree that paved the way for its purchase of control of NBCUniversal (CD June 14 p7).
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Powell said he’s not worried about the investigations into the cable industry’s business practices: “There is nothing that is particularly surprising” about the investigations, said Powell, who has worked at DOJ’s Antitrust Division. “The division frequently examines industries and explores questions particularly when it is in a dynamic space in which there are new entrants entering the market. But that is a long, long way from … evidence of an antitrust violation, and to collapse the existence of questions with an ultimate antitrust concern is exaggerated.”
Powell endorsed the industry’s pursuit of broadband data caps and usage-based pricing: “Simply put, heavier users who cause more costs should pay more than lighter user who cause less cost,” he said. “It is not particularly radical because most consumption services with fixed costs work that way. In the hot Washington summer if I want to run my air conditioning at 70 degrees all day and my neighbor wants to open their windows and turn it off, I am going to have a much higher bill than they are,” he said. “This is about how to fairly allocate the price of the network among users who have different use and demand profiles over time.”
The current regulatory regime for the video marketplace is “woefully out of date” because it doesn’t account for the Internet at all, said Powell. He suggested that lawmakers work to construct an “entirely different model,” rather than creating new rules to complement the existing regulatory structure. Powell plans to testify before the House Communications Subcommittee Wednesday about the need for modern rules to govern the video marketplace. (See separate report.) He said there’s ample justification for the government to reconsider the video market regulatory regime “given the rapidly eroding predicates that justify so many of the rules that exist today.”
The radical transformation of the video market should spur lawmakers to re-examine retransmission consent, Powell said. Sure, people should be paid for the fruits of their labor, said Powell, but retrans deals are contributing to the “exponential” growth of programming costs. Powell said the cable industry is “not yet prepared” to offer some sort of solution to the increasing cost of video services to consumers.