FCC Chairman Tom Wheeler didn’t hold back today in his address to a group for which he used to lobby: Cable operators must “overcome the temptation to use your predominant position in broadband to protect your traditional cable business,” he said at the industry’s INTX confab in Chicago.
He sent the warning because history shows that, without significant competition for high-speed Internet services, cable has “economic incentives to use that market power to protect your traditional business in a way that is ultimately harmful to consumers.”
If they do, then he’s prepared to fight — as he showed with the FCC’s tough net neutrality rules and reclassification of the Internet, which the National Cable and Telecommunications Association opposes. When the rules take effect on June 12 “there will be in effect strong protections to shield against harm to an Open Internet.”
He added that he supports separate proposals to help consumers buy set top boxes, and to assess “whether retransmission-consent negotiations are being conducted in good faith.”
The NCTA says that it appreciates Wheeler’s use of the convention platform “to highlight the importance of net neutrality” — which the trade group says it also supports, without the regulations.
But it’s clear that the FCC chief irked his audience. People applauded when Liberty Global CEO Michael Fries, in a panel that followed, said he’s “baffled by the Chairman’s remarks.” Wheeler seemed to have “a presumption of guilt …that I’ve never experienced in my life.” The net neutrality rules are “terrible.”
Time Warner Cable CEO Rob Marcus says his company operates “in a different environment than he seems to live in…Competition has fueled a tremendous ammount of investment on our part.”
Cablevision CEO Jim Dolan differed, though, saying that he doesn’t “see any of these regulations affecting us much at all” — although he says that the possibility of government subsidized competition “is very dangerous.”
In making his case, Wheeler touched on Comcast’s aborted $45 billion acquisition of Time Warner Cable. The FCC “recognized that broadband had to be at the center of our analysis, and that video was, in essence, an application that flows over networks and that could be supplied both by the owners of facilities and by competitors that use broadband pathways to compete against the owners of those broadband pathways.”
He added: “You are no longer the ‘cable’ industry. You are the leading association of leading broadband providers.” And “you don’t have a lot of competition, especially at the higher speeds that are increasingly important to the consumer of online video.”
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