Note: This regulatory positioning of the NCTA represents big fights ahead for public interest obligations.

from: TV Technology [1]

Cable Chief Calls for Dereg Excepting Interconnects

May 17, 2007

Cable lobby chief Kyle McSlarrow headlined a recent Media Institute luncheon where he riffed on silos. He said cylindrical storage structures were an outdated model for a regulatory regime.

"After all, if 'bits are bits' in a digital, IP world, how can we even figure out what we're regulating?" he said.

Current telecommunications laws were crafted when phone companies provided phone service; cable companies did TV; and broadband was a myth associated with a mysterious band of supergeeks. Now phone companies are doing TV using fiber-optic newtorks; cable companies are launching phone service over digital infrastructures; and broadband remains a myth associated with a mysterious band of supergeeks except for in Korea.

Cable's big beefs with the silo structure is how different industries are regulated differently for the same service. The phoners have more favorable TV franchise rules than cable, for example, while cable has no interconnect rights with telco voice systems. The FCC eased franchise conditions for telcos in March, but cable operators were left out.

"There are several reasons to break down regulatory silos," McSlarrow said in his 3,497-word speech. "First, and most obvious, technology has increasingly, though not completely, rendered arbitrary and counterproductive what used to be bright line distinctions."

He likened the silo approach to "unbundling by government fiat," which he thankfully explained as "the forced sale, resale, lease, or use of networks or devices attached to those networks.

"Those who advocate a la carte, must-carry regimes, so-called 'open' or forced network access, or net neutrality fall in the unbundling camp," said McSlarrow several paragraphs after calling for an interconnect requirement on phone service.

The current FCC falls into unbundling camp, under McSlarrow's criteria. Commission Chairman Kevin Martin is a vocal advocate of a la carte channel pricing, and the FCC last month opened dockets on network neutrality and dual must-carry.

McSlarrow suggested the FCC get small. He cited a proposal from the Progress and Freedom Foundation to limit the regulatory powers of the FCC.

"That proposal envisions a role for the FCC more like that of the Federal Trade Commission," he said. "The FCC would have authority to intervene in the marketplace only if it determines that marketplace competition would not adequately protect consumers against unfair methods of competition or unfair and deceptive practices. There would be a presumption against regulation, and in fact all FCC regulations would sunset in five years."

Transcript of McSlarrow's sppech [2]