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McSlarrow Sees Clearer FCC Broadband Picture

How close is the industry to having an agreement on legislative language to clarify the FCC’s broadband regulatory authority? National Cable & Telecommunications Association PresidentKyle McSlarrow believes they are not quite there. It’s close, but still with a few sticking points remaining. They are thorny issues, but the FCC has called for more comments on two of them.

That may be the highest-profile issue facing the NCTA president, but his docket is plenty full, especially given cable’s increasingly vital role as Internet access providers.

Washington Bureau Chief John Eggerton talked to McSlarrow about cable operators and policy issues, and the prospects for an industry solution to the Title II fight, among other concerns. An edited transcript follows.

What is going to happen on Title II, and how big an issue is it for the cable industry?

I would reframe it. I think the issue is whether or not there is a set of openness principles that can be agreed to by our industry and other ISPs that would preserve openness on the Internet, balanced with our ability to invest and innovate.

Is there such a set of principles?

I happen to be one of those optimists who have long thought that that is possible, and there have been a number of negotiations and stakeholder discussions at the FCC and outside the FCC that suggest to me that a lot of progress has been made. I don’t think that work is done yet, but that is the right way to focus.

We have tried to encourage the FCC and the Hill and other stakeholders to focus on [this]: If we can get the principles right and if we can tee up a legislative effort, we don’t have to fall into the trap of having to bootstrap a new jurisdictional play, which is really what Title II is about.

Title II is a means to an end. It is not really about whether we should be regulated as telecommunications services; it was put into play because the FCC faced uncertainty and question marks about its Title I jurisdiction in order to do openness principles. So, we are focused on trying to fi gure out if there is a way to get stakeholder agreement on openness principles, go to Congress and have them work on targeted legislation.

You have been part of those discussions. Are you close?

The way I would categorize it, the FCC negotiations that went on for a couple of months got us 75% of the way there. The discussions that have taken place since then have gotten us to 90%. But the last 10% is hard. It is not an accident that the FCC has asked for more comment on specialized services and wireless services, because those are two of the big issues that have been very knotty problems we have been trying to address.

So, does the FCC request for more comment on the network neutrality rulemaking take Title II reclassification off the table until December?

I think it would be an overstatement to say it would take Title II off the table [see sidebar]. But I would say that the FCC is highly unlikely to take any action before November.

If it does, what would be the impact on the cable business?

Our view is Title II, even as proposed under the Third Way approach, is problematic for a lot of reasons. But I would put right at the top the unbelievable uncertainty about what it exactly means.

For us, it is not just about whether the capital markets react to it; it is about what we actually do to deploy new products and services. And my guess is, if Title II actually moved forward, people would just stop for a while. They might not stop for a long time, but they certainly would stop for a while to figure it out. That can’t be good for us, and it can’t be good for our customers.

What is going to happen with Universal Service Reform [USF], which, like a lot of issues, appears to be tied up with Title II?

There is no question in my mind, in my discussions with the FCC, that they want to get going on USF, and we want them to get going. We actually think they can move forward under Title I even after the Comcast decision. I think that is something they are actually thinking through. We are very encouraged by their approach to universal service fund reform, and very supportive of the direction the FCC wants to go. But, again, in their view all these issues are intermingled with the underlying jurisdictional question, so I don’t know how they are going to come out on that. On the Hill, I think there is going to be a hearing probably the week of [Sept.] 13in the House Energy and Commerce Committee of Chairman [Rick] Boucher's Universal Service bill, which we support.

So, it does seem like the House will move that legislation along. But I think it is an open question whether the Senate has any time to take it up in the fall. There is not a counterpart piece in the Senate, so unless there is some rapid activity on the Senate side, it is hard to see getting it done in the short period of time they have.

What are the keys to USF reform for the cable industry?

This is true for both the Boucher bill and where the FCC wants to go. We are not, as an industry, big recipients of USF money from the high-cost fund. It is just minimal. We have by and large deployed these networks with private capital. So, the biggest issue we had, which the broadband plan embraced and which Chairman Boucher has embraced in his legislation, is that in those markets where you have a wireline provider like a cable company that has built out a network without using a government subsidy, that is by itself proof that there is not the need for high-cost funding to subsidize another provider.

Do you expect any movement on an online privacy bill?

I think there will continue to be more hearings in the fall and more activity on it. But it just feels like most of that is going to roll over into next year.

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