Editorial: Sizing Up the Competition - Broadcasting & Cable

Editorial: Sizing Up the Competition

FCC must look at Internet ecosystem holistically
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Cable operators will be gathering in Chicago this week to take a look at the future, which National Cable & Telecommunications Association president Michael Powell told B&C would definitely be a broadband-centric one.

No surprise there. Cable operator investment was instrumental in helping bring about all those broadband wonders the FCC is always touting.

The NCTA is not ready to change its name to “The Internet and Television Association.” But in February, it did renew its Patent Office application to hold that name in reserve, and the guess here is it is only a matter of time before that name reflects the reality.

If cable operators had any doubt that the FCC also considers its future inextricably tied to the Internet, FCC chairman Tom Wheeler, with an assist from now-former attorney general Eric Holder, made it clear.

In hailing Comcast’s decision to pull the plug on the Time Warner Cable deal—it was actually the FCC and Justice Department’s decision by proxy—both signaled that the deal-breaker came with the notion of combining the company’s broadband subscribers.

Mind you, that was the “signal” from the FCC. The commission, in fact, does not have to explain just why staffers reviewing the deal had decided that it should not be approved, and that no conditions could convince them otherwise.

That’s a problem with the way this deal was undone. “Right now, it is no more clear how other combinations/market swaps among Comcast, TWC, Charter, Bright House, Cablevision, etc. that may be proposed in the wake of the current deal might be regarded by regulators (e.g., how many broadband subscribers is ‘too many’ with respect to the power to impede over-the-top video competition?).” This was the assertion last week from Wall Street analyst Paul de Sa, who considered it a key takeaway from the deal’s collapse.

We checked with the FCC and a spokesperson said that while a draft order opposed to the deal had been in the works, because it was never actually circulated by the chairman, that work product will indeed not be made public. That means, as de Sa pointed out, other cable operators don’t have any guidance on how the FCC might receive other deals, other than the general warning that since an ISP is considered a gatekeeper, essentially by default, a bigger gatekeeper raises red flags.

We have said it before, and will continue to do so: If the FCC believes bigger is necessarily threatening to the Internet ecosystem, it must start looking at that system holistically. If size matters, then so do Google and Netflix.

Cable operators will be gathering in Chicago this week to take a look at the future, which National Cable & Telecommunications Association president Michael Powell told B&C would definitely be a broadband-centric one.

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