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April 29, 2013

Powell in PA—Programming Costs, Net Neutrality & Cable's Need to Get Flashy

As Michael Powell settles in to his 2nd year on the job as pres/CEO of NCTA (Thurs is his anniversary), the war over rising programming costs shows no signs of slowing with Cablevision' s antitrust suit against Viacom the latest high-profile volley. But calling it a programmer vs operator conflict is simplistic, Powell told the crowd gather in Harrisburg Wed for the Broadband Cable Assoc of PA's 25th annual Cable Academy. "There are a lot of varying beliefs—not that it's not a problem, but in how helpful the govt can be in solving it," he said, warning against the law of unintended consequences.

He lumped retrans into a general programming costs category, saying that even if retrans held flat starting tomorrow, the rising costs of sports would still be a challenge. And programming costs is one of the toughest issues he's ever seen (and remember, he's a former FCC chmn). "Ultimately, I don't know how it will be resolved. Maybe it will have to break more," Powell said. "The value of my table is that I do have them [programmers and operators] all together. It's a very good forum to force the board members of NCTA to talk about this problem."

While he called programming costs a big problem, on the flip side, he thinks it's one of the industry's "biggest advantages" because the expense is a major barrier to streaming alternatives. (By the way, Powell stated that no public policy discussion about video excludes Netflix, Hulu, Google, Amazon, Intel, etc).

Another concern facing the industry continues to be net neutrality, with Powell calling the FCC's rules "clunky, but mostly manageable." His worry is that a Verizon win in its legal challenge of the rules would spur an explosive reaction, with Congress instantly codifying the rule or worse—the FCC does it all again, but this time under Title II. "That would mean instantly thousands of regulations would apply to you," he told the room full of PA cable operators. "It would be as if you were AT&T of the 1980s. We have consciously avoided that regulatory treatment for 15 years now."

Right up there next to the net neutrality challenge in intrigue is the ongoing Aereo litigation, which if it became recognized as legal nationwide, could create packages of Netflix and Aereo or Roku and Aereo, etc, Powell said. "They suddenly have a pretty sweet bundle offering at what looks like a lower cost... That's a much more serious alternative," he said.

His parting advice was to change cable's perception ("We are culturally fun to hate") and to stop being so cautious about the future. "Google announces Google Fiber 2 years before it does it and then brags about it for 2 years. We never do that, and we should," he said, then promising cable will be "screaming from the mountaintops" at the Cable Show June 10-12 in DC. "Our society has less and less attention span. Less patience. The media world is noisier and more fragmented. You have to be loud, flashy and persistent."

EDITOR'S NOTE: This article originally appeared in CableFAX Daily. Go here to subscribe.







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