McSlarrow: FCC Stuck in a Time Warp


National Cable & Telecommunications Association President Kyle McSlarrow says there is a disconnect at the FCC between its free market mantra and the policies he calls some of the most sweeping examples of government micromanaging in recent memory.

He said the FCC seemed stuck in a time warp. He conceded that the industry had hit a rough patch on the customer service front--but he said that was history.

In an end-of the-year conference call with reporters, he cited proposals pushing a la carte, unbundling cable services, and multicast must-carry.

He also said the cable industry had concerns about two items on the FCC's meeting agenda for Wednesday.

First is the release of a cable pricing survey he says is based on two-year old data and is a bad metric to boot since it does not take digital cable into account, or satellite, and looks at a rate card rather than the special deals that have become the currency of an increasingly competitive market.

He called the study "almost entirely useless" as the basis of any policy decisions.

FCC Chairman Kevin Martin has talked of skyrocketing cable rates as a reason to ease telcos way into video and broadband to provide price and service competition. McSlarrow says there is already both.

McSlarrow points out that on a per-channel basis or a value calculation of price per hour of video watched, cable's price has actually gone down over the past decade while at the same time it has invested $100 billion to upgrade its plant.

He was also concerned about the FCC's plan to deal with video franchise reform issues. Martin has telegraphed a desire to put a shot clock on local franchise authority's consideration of franchise proposals, as well as to limit franchise conditions and build-out requirements for new entrants.

McSlarrow said that NCTA was OK with the shot clock, saying it might have even been his idea in the first place, but that the other possible elements needed to be pared back substantially.

He said that what the cable industry wants, and what the state video franchise reforms and the stalled federal reform generally recognize, is rule changes that are applied to all parties equitably.

McSlarrow warned that the FCC proposals were probably still in flux so he would have to wait and see. An FCC official confirmed that the item would likely look somewhat different from the initial outlines provided by Martin.

McSlarrow said that if it is sufficiently narrow--like, for example,  a shot clock, NCTA would be unlikely to challenge the rules, but that if it were broader, he would have to make that determination.

On the legislative front, he said he did not see anything from the Democratic Congress that would derail cable's business plan, which was to continue to provide increasingly bundled services and turn video customers into occupants of cable's suite of offerings, video, voice and data, the so-called triple play.

He said he thought the industry had gotten itself painted into a corner on the network neutrality issue by addressing a business plan that nobody was planning. The key going forward, he said, is to make the point that there is no problem that needs fixing, and that a problem must be essentially clear and present before the government steps in to take the extraordinary step of regulating the Internet.