Comcast’s Essential Adviser

Comcast executive vice president David Cohen heads up government and regulatory affairs for the nation’s largest cable operator, and serves as a trusted counselor to CEO Brian Roberts. He agreed to share some of that counsel on policy matters with Multichannel News readers in the run-up to The Cable Show in Washington, D.C., this week.

Cohen doesn’t predict a lot of action out of Congress — a pretty safe bet these days. And though the Federal Communications Commission is pondering whether to define over-the-top providers as multichannel video programming distributors (MVPDs), Cohen doesn’t think it has the authority to do so. He sat down with MCN Washington bureau chief John Eggerton to talk about the FCC, pending cable a la carte legislation introduced by Sen. John McCain (R-Ariz.) — and, for the first time, his take on the media violence issue.

MCN: What cable-related bills do you see coming out of this Congress?

David Cohen: Candidly, I don’t see any non-mandatory cable or telecommunications issues getting much traction in this Congress.

MCN: Not even on cybersecurity or piracy, two hot topics these days?

DC: I don’t think piracy. Cybersecurity is something around which there probably should be action. But whether the two houses can agree with each other on what should be done in order to pass a single piece of legislation, I don’t know. [The House has passed the cable-backed Cyberintelligence Sharing and Protection Act (CISPA) bill, but the Senate appears intent on coming up with its own legislation.]

By next year, Congress is going to have to deal with the renewal of STELA [the Satellite Television Extension and Localism Act] and the compulsory copyright license [the blanket license that allows satellite operators to deliver distant signals to subscribers who cannot get a viewable signal from their local affiliate]. But that is in the category of mandatory things. [STELA expires unless renewed by the end of 2014].

I think there is enough momentum around an Internet sales tax and the moratorium on taxation of Internet services. That is a place where you could see activity in this Congress.

I don’t see comprehensive video reform occurring in the next few years. I don’t see the adoption of a la carte legislation happening in the next Congress.

I think it is doubtful that you can get FCC reform done. One of the problems around topics like video reform, and even cybersecurity — although there is at least more crystallized thought on cybersecurity than on video reform and FCC reform — is that there is no real consensus as to what it should look like. A lot of different people have talked about FCC reform, but they have all talked about different things. So it is a real challenge to move from the amorphous thought to crystallized legislation, and then have to address how you get it through both the Senate and the House.

MCN: Are there any major changes you would like to see in the reauthorized STELA?

DC: We’re comfortable with the current regime. We think the compulsory copyright license remains the most efficient and equitable way to give multichannel video distributors access to distant signals for the benefit of their customers. We’ll certainly be advocating for a simple extension of the current regime.

MCN: Once the FCC gets settled, is there anything you see happening there?

DC: Clearly, they will do an annual competition report, and that obviously happens in the ordinary course. And the Sprint transaction is still pending in front of the commission, and I’m assuming there will be action by the commission on that transaction at some point, maybe even before the FCC becomes settled. But right now there are no other major FCC proceedings.

I am actually assuming there will be some crystallization around rules for the incentive auction of spectrum, and maybe even the running of an incentive auction in order to tee up an ultimate spectrum sale. I doubt we will get to the sale in the next two years.

MCN: Has the media violence issue receded, and should it have?

DC: I haven’t had a chance to talk about violence in the media, so you will be the first reporter to talk to me about it.

I do think it is certainly impossible to say that in the discussions around some of the terrible shootings we’ve had in America that it would be inappropriate to talk about violence in the media. I think we as a company, and as an industry, have been pretty straightforward about this. We do produce content that is not appropriate for all viewers. And that is true whether it is violence or sexual situations or conversations about adult matters.

It’s part of the great strength of the creative economy that we have in the United States. The creative economy in the United States is a huge economy, one of the largest economies in the world. The last thing you want to do, even if it were legal — and there are many, many significant legal issues — is to interfere with the creative economy as a matter of governmental regulation or public policy intervention.

And that is particularly the case when you have an industry that has been recognized that it is producing content that is not appropriate for all people. And that is why we have parental controls; why we have the V-chip. And you can say to yourself, “That’s all well and good but people don’t even know about them.” And that is why the industry has stepped up with a huge public-education campaign around parental controls, movie ratings, television ratings, what they mean, making sure parents know about them and how to use them. So that, in fact, parents can control the content that comes into their homes and control the content that their children see outside their homes in theaters.

I am proud of industry initiatives. We have stepped up in a big way the level of control we put in the hands of parents so they can screen content from their families that they determine is not appropriate.

MCN: If network-neutrality rules are overturned, Comcast is still subject to them for several more years. Does that tilt your playing field?

DC: I think the answer to that is no. We participated in the negotiations as to what these rules would look like. We supported them, and the basis of our support was that we believed the rules reflected the way in which we were conducting our business, and the way in which we expected to continue to conduct our business and the way in which everyone was conducting their business.

That is also why we agreed to the condition in the NBCUniversal transaction, because there is nothing in those rules that is contradictory or conflicting with the way we and everyone else in the industry is currently conducting our business and plans to conduct our business.

MCN: What is your take on FCC chairman-designate Tom Wheeler?

DC: I am of a generation that didn’t work with Tom Wheeler. I came to the industry not only long after he left the NCTA, but I think CTIA [the wireless trade group]. But I have been impressed with his writings. I have been impressed with the few public statements that he has made.

I think he really understands the business. I think he is incredibly knowledgeable about public policy and public policy implications of our industry. I think he was intimately involved with Julius Genachowski and the president in developing the telecommunications policy for the Obama campaign and the Obama presidency. And, so, I think he is an almost uniquely qualified individual to be chair of the FCC under President Obama.

He knows what the FCC’s directional thinking is on our issues. He brings a sound public-policy background to analyzing those issues. But he also understands the business imperatives and the way in which business operates. I think he is in the ideal position to appropriately balance consumer interests with business realities.

MCN: What was your main takeaway from the Senate future of video hearing and John McCain’s a la carte bill, which he plugged at that hearing?

DC: I have several main takeaways.

No. 1, and not withstanding Senator McCain’s introduction of legislation, I did not detect any serious interest by any member of the committee in pursuing an a la carte regime. And by the way, as soon as Senator McCain left the hearing room, there was very little mention of a la carte, and I think the focus was on other issues in the video space, including the role of online video.

I think the cost of programming is a legitimate and continuing concern. I think most of the focus moved to those sorts of issues and I think those are appropriate issues for the Congress to become educated on.

MCN: How important is it for the FCC to come up with a definition of online video in terms of its regulatory status?

DC: I don’t think the FCC could lawfully determine under the telecom act that an over-the-top provider, which I call an OVD, is an MVPD. So, I don’t think it is very important for the FCC to act because OVDs are not currently being treated as MVPDs.

MCN: Even though an MVPD definition for an OVD might help cable because it could allow the industry to move to an OVD model to get out from under access requirements and other regulations?

DC: I just don’t know that the “access regulations” are the major impediment, because I have no idea if it makes any sense for all cable companies to be delivering their content online outside of their geographic footprints. The No. 1 impediment to that is none of our programming agreements give us the authority to do that. So, it is not a regulatory impediment, but a business and contractual impediment, and no matter what the regulatory scheme is it is unclear to me how that is going to fundamentally change the way in which our services are delivered.

MCN: Talking about fundamental change. What should the FCC do to speed the transition to Internet protocol and how big an issue is that for cable?

DC: Obviously this is really important for AT&T. We are beginning our shift to an IP world and we frankly don’t see the regulatory framework as much of an impediment. We started with our excellent platform, which is basically using IP delivery systems for the guide and on-demand programming, but it really provides a platform, if we ultimately choose to do so, to deliver our video service on an IP basis as well.

I think the more complicated issues in the IP space may be issues of data usage thresholds, consumptionbased billing, and byte caps. I hate to even use the term byte caps because we don’t even use byte caps anymore, and we don’t use that language.

But I think that, right now, it is pretty clear under the FCC’s open Internet order and the rules that are in place that usage thresholds and consumption-based billing are fully lawful. But to the extent there is any doubt about that, more clarity about that subject would definitely help to speed the transition to IPbased video-delivery systems.