Top broadband plan advisor Blair Levin suggested Tuesday that it was foreseeable back in the mid-1990's--when he was at the FCC under then Chairman Reed Hundt--that the Internet was going to supplant broadcasting and traditional cable video service.
"In 1994, you could envision as inevitable the Internet replacing existing platforms for communications and entertainment," he said in a speech to the American Cable Association policy summit in Washington. "And based on numerous metrics, that transformation is well underway," he said.
What he said was not as clear was who was going to provide that access--it turned out to be cable in this country. And he at least had some encouraging words for that medium. "[G]iven that the cost of upgrading the performance of the cable platform from DOCSIS 2.0 to DOCSIS 3.0 is significantly lower than the telcos' cost to upgrade, it is likely--though not inevitable-that cable will increase its lead," he said.
But that means the cable industry needs to focus on those so-called "over the top" video offerings online. He basically gave cable credit for investing in providing online service. He also said cable should be in the best position in most cases to provide the massive bandwidth needed to deliver over-the-top video.
Cable, he said, may be the only business to ever have to build out, then completely rebuild for a product "is likely to challenge, if not replace, the product for which the
original infrastructure was built."
Levin took aim at cable prices and bundled programming, saying that consumer anger over those increases reminds him of that leading up to the 1992 cable act, and that there will likely be "Some kind of response, either from the market or from the government."
Levin said it was inevitable--the speech was called "Owning the Inevitable"--that someone would invent the iPhone equivalent of the set-top box, which was why that inquiry was made part of the broadband plan, though he had not originally planned to deal with it in the plan, he said. "The current system is not providing the kind of choice Congress asked for and consumers want, he said.
The FCC Wednesday is scheduled to open an inquiry on creating a set-top device to wed broadband and traditional video.
Levin said that mobile broadband and targeted, interactive advertising were two more inevitabilities, though he said it was unclear what the impact of the former would be on fixed broadband, and that while it was inevitable that someone would "unlock" the value of interactive advertising while still protecting privacy, who that would be is "up for grabs."
Following Levin's speech, a number of top ACA members suggested that they might be OK with a move to an Internet video model if they were the one distributing all those bits.