Genachowski: FCC Will Protect Consumers

Chairman talks retrans, spectrum and a free, open Internet 5/11/2010 09:15:00 AM Eastern

With the National Cable &
Telecommunications Association show in Los Angeles fast approaching (click here for complete Cable Show coverage),
FCC Chairman Julius Genachowski talked with B&C about a broad
range of topics. On the docket: everything from retrans and spectrum
plans, to his assumption that Internet service providers (ISPs) will
preserve a free and open Internet even without rules of the road for
network management regulation.

Julius GenachowskiIn this exclusive interview
with B&C Washington Bureau Chief John Eggerton, Genachowski
previews a shout-out to cable operators regarding the value of fixed
plant (he was to be interviewed during the show by NCTA President Kyle
McSlarrow), weighs in on the retransmission consent regime (creaking
and likely in need of tweaking, he suggests), and explains why he remains
confident he can work with broadcasters on a viable spectrum reclamation

 The Supreme Court last
week punted--for now--on whether to hear Cablevision's challenge of
the must-carry rules. The chairman calls must-carry a vital part of
the "ecosystem."

 He refuses to detail
how the FCC would regulate network management in the wake of the federal
court's decision in the BitTorrent case. But he does expect ISPs in
the interim to preserve Internet openness. For its part, NCTA members
have pledged to abide by the FCC's openness principles.

 But the chairman also
warned any bad actors out there that the commission "will protect
consumers." The following is an edited transcript of that conversation. 

What message do you have
for cable operators gathering in L.A. this week?

One of the things our broadband
plan helped us recognize was the unique and vital role the cable plant
can play and needs to play in the economic future in the United States.
It is potentially a competitive advantage for the United States that
we have a cable infrastructure. And I think that is a real opportunity
for the country, as well as for the cable industry. And, obviously,
more and more people in the industry recognize that. 

So, wireless broadband
is not going to make that fixed plant obsolete?

No, we need to lead the world
in wired broadband and wireless broadband. It's not either-or. Both
are essential platforms for innovation. We need to have both world-class,
universally distributed wired and wireless infrastructure in the 21st

In the wake of the BitTorrent
decision, NCTA members have pledged to abide by the FCC's Internet openness
principles. But do you have any advice to any potential bad actors who
don't sign on to that?

Preserving a free and open
Internet, I am as convinced as ever, is essential to making sure that
we have a platform for innovation and competition and expression. And
so, the importance of preserving the openness of the Internet is as
important as it ever was.

 The transparency component
is also very important. I think, on all of these issues, it is in everyone's
interest to develop high-level rules of the road so that the freedom
and openness that exists on the Internet, that consumers expect, that
innovators expect, is preserved, so that businesses throughout the Internet
ecosystem can continue to innovate and invest and contribute to our
broadband future.


But if it is months or
years until the FCC's authority is clarified, what can the FCC do?

We expect providers of broadband
service to maintain a free and open Internet, and be honest and transparent
with consumers. 

And if they aren't?

I assume they will. But if
a problem arises, the FCC will protect consumers. 

What if anything needs
to happen with the retransmission consent process?

We are taking a look at the
framework. The experiences over the Christmas/New Year's holidays and
in April were real warning signs that there is some creakiness to the
framework that may not be serving consumers well.

 I think it is important
that private parties be able to negotiate and strike market deals, but
we do need to make sure that the overall framework serves consumers
who are directly affected by what happens during these negotiations
but don't have a seat at the table. 

Would you argue that
it is in the interest of industry as well as consumers not to have viewers
lose access to TV station signals?

Yes. We need to make sure there
is a framework that allows market-based deals but serves consumers as
well. The two issues that have been identified as ones to look at as
part of the framework are signals being pulled from the air, particularly
without notice; and the effects on prices that consumers pay. Looking
at the overall framework from those perspectives will be at the heart
of our review. 

Your predecessor, Kevin
Martin, slammed cable rates with relative frequency. You talked about
them at the NAB convention, too, but in terms of the rise in retrans
fees. Does that suggest you don't pin the rise in prices entirely on
the cable industry?

I think there are many factors
involved. I think from a consumer's perspective, they are less interested
in all of the complex reasons than in the bottom line of getting a fair
deal for the amount they are paying. And so, consumers have concerns
and we have concerns. 

Now that Rep. Rick Boucher,
chair of the House Communications Subcommittee, and others on the Hill
have made it clear that they think a spectrum inventory should precede
and inform any reclamation of spectrum from broadcasters or others,
how can you stick to the specifics of the agenda you outlined in the
national broadband plan?

We're going to continue working
with all the stakeholders, working with the wireless industry, working
with consumer electronics manufacturers, working with broadcasters.
We're going to continue working as a resource to Congress. The goal
is to make sure we have the spectrum that we need as a country to lead
the world in mobile innovation.

 We know that there are
real challenges to that. We know that there is a real risk of a spectrum
crunch, and we know that we can't wait until we have the crisis to solve
it because there is no solution that can be implemented instantaneously.

 Running, as we have been
doing, a strategic exercise for spectrum to make sure that the use of
our spectrum serves our overall national needs is essential. We will
continue to work with everyone involved and be very clear about our
goals, which are making sure we lead the world in mobile, that we have
the infrastructure and spectrum we need for mobile innovation, that
we continue to have a vibrant broadcasting business.

 As you know, in the broadband
plan there is a proposal for a win-win-win solution, and we will continue
to work with all the parties on implementing it. 

You called it a spectrum
"exercise." How much flexibility is there in terms of the timetable
and who the spectrum comes from and how much? It is a flexible document,
so can those things change with new information?

We are focused on the very
clear goals that are in the plan: recovering 500 MHz over the next 10
years, having sufficient spectrum available for licensed and unlicensed
use, making sure we preserve a vibrant broadcasting industry, adding
market-based incentives and choices for broadcasters. It is important
that we work on [these things] as a country to make sure we have the
mobile infrastructure we need for the 21st century. 

Why are you so confident
that the spectrum reclamation plan can remain voluntary?

There is so much value in the
broadcast spectrum that in order to unlock it, we have to work on it
together. It is one of those issues that, if we work on together, we
can free up spectrum for mobile broadband, we can give more choices,
and unlock value for both broadcasters and the American taxpayer. I
am convinced that there is an opportunity and a path to an outcome that
is a win for everyone. 

You have talked to NAB
President Gordon Smith. Did you get the sense that you can work with
the industry on this?

I don't see any reason why
we shouldn't be able to. Providing additional choices to broadcasters
and giving them the option of sharing spectrum, for example, in a market
really is a win-win. I'm optimistic we can get to an outcome that works
for everyone. 

I know you can't talk
specifics of the Comcast/NBCU deal, but the FCC has asked for more information
about access to online video. Is the FCC going to have to get into online
video access if that is where video delivery is moving?

I can't talk about the specifics
of the transaction review, other than to say the process is moving and
we intend to be very thorough in our review and tackle all the significant
issues that are raised. 

You talked at the NAB
convention about protection of basic must-carry rights. What do you
think about the future of must-carry as the law of the land?

It is the law of the land,
and it is an important part of the ecosystem along with retransmission
consent. As we talked about before, the retransmission consent framework
is something that hasn't been revisited in a long time. Many players
are coming to the FCC saying there are issues we need to review, and
we think there are issues to review.  

Will you give us the
exclusive on whether you are going to reclassify Internet as a Title
I or Title II service?

No, John. 

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