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Powell: Net Neutrality Decision Likely 'Hodgepodge'

National Cable & Telecommunications Association president Michael Powell says he expects the "likely result" of the network neutrality rule court challenge lodged by NCTA and others is "a hodgepodge of wins and losses that will create a Swiss cheese of a regime."

That came in an interview for C-SPAN's Communicators series, which airs Saturday (Dec. 12), with a repeat airing Dec.14.

He was talking about the oral argument last week in which three judges of the U.S. Court of Appeals for the District of Columbia probed the arguments on both sides and appeared to offer both sides some hope on different elements of the complicated legal challenge.

Powell said that result will leave more "confusion and complexity" than "stability and finality."

He also said he expected whatever the result likely to be challenged in the Supreme Court.

Powell pointed out that judges don't make policy, or decide whether the FCC has made a wise decision. He said that even if somewhere in the statute the FCC does have the power to reclassify broadband as a common carrier, there is still the question of whether they should exercise it in this way.

"Why will Title II result in faster Internet for consumers," he asked. "Why will Title II result in cheaper prices? Why will Title II incent carriers to build in rural America? Why will Title II advance our national ambitions around infrastructure?" He said the government has never been forced to answer that question, and he has not heard a good answer.

Powell pointed out that the court itself acknowledged there were other ways to get to the same level of network neutrality protection without what Powell called the "damaging regime of Title II." He pointed out that Judge David Tatel, who had written the opinion in the first Open Internet decision, in last week's oral argument asked why the FCC had not followed the (Sec. 706) roadmap it said he had laid out for them—before switching gears and moving to a Title II regime.

Powell says that even FCC chairman Tom Wheeler had been considering alternatives to Title II.

He added that the oral argument had a lot to do with how much ambiguity there was in the statute. He said even if there is ambiguity, that doesn't mean the FCC is not still required to interpret it "faithfully to Congress' wishes."

Asked about the set-top box market and the harm in the "movement to get rid of the set-top boxes and open up that market"—a reference to NCTA's opposition to adopting an AllVid approach to navigation devices—Powell said that was not the market anyone wanted. 

He asked when it was appropriate for the government to intervene in a market that was functioning well. "Can anybody really, credibly argue that access to valuable content in new and amazing forms is not running at light speed."

He said the second thing is that consumers don't want more boxes. Streaming has overtaken what a lot of people have relied on a box to do. As streaming becomes more dominant, he says, DVRs become less significant. 

For those telling the FCC they want to build video services around boxes that cable operators will have to design, develop, build, manufacture, inventory and deploy to make that possible, he says that is so "retrograde."

Cable is not trying to monopolize the box market, he said. "We're trying to get rid of boxes. It's a pain point. Consumers hate them."

There was a lot of hate to go around. He said cable ops hate managing inventory, and having to send someone out to the house when the box breaks. "If cable was an app, you could download it onto any device." He said that solves the congressional mandate that cable service run on competitive devices.

He said he sees the stories about cord-cutting and migration to digital and sub losses, and he points out that is "Real competitive heat."

Powell said the AllVid effort is clearly an effort to get access to the consumer "big data" sets or personal data around viewing habits and searches that are the "holy grail" of monetization.

He said it was clearly an effort to get government assistance in securing access to that data. "If you are the TV One network, " he explained, "you've negotiated effectively with Charter or Comcast for carriage, you've negotiated for what channel you sit on, what tier you'll be on, you've had a negotiation around advertising and what the splits will be...If I give that deal to you, and then that content can be sucked out the back door through a box and put into Google's box, who doesn't negotiate with TV One and [president] Alfred Liggins for access to the content but is merely taking it, and is free to strip out all that stuff he negotiated, you're allowing one set of commercial interests to monetize valuable property they didn't negotiate for and enjoy all the remunerative benefits without having to share that with the content owners."

He called that potentially illegal and blatantly unfair. He also pointed out that Netflix, Hulu and Amazon Prime all did negotiate for rights to content.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.