NCTA Chief Powell Criticizes ‘Naysayers’ Who ‘Wail’ at Cable Pricing Models

Time Warner Cable CEO Glenn Britt also called for simpler user controls and predicted set-tops will be phased out in favor of operators sending content on Internet Protocol. Although box makers Cisco and Motorola Mobility, which Google is acquiring, “don’t want to hear that,” he said in response to a moderator’s question that he thinks set-tops may be on their way out. “Our old video platform worked for a really long time, but it’s somewhat archaic,” and more software is being written to IP standards, which are the future, Britt said. He sees an “all-things IP” future.

Cisco and Motorola Mobility are improving set-tops and adding other products for pay-TV companies’ IP services, their representatives told us. The manufacturers see gateway devices that act as set-tops and cable modems as the household device of the future, supplanting in some cases the need for standalone boxes. Boxes are “getting smaller, they are getting less invasive, as technology evolves,” said Chief Technology Officer Ken Morse of Cisco Service Provider Video Technology Group. “We still see a large market for them worldwide, but with the passage of time, other devices become very capable” of doing similar functions as set-tops, he continued: The “most important device” in households will become gateways. Cisco “absolutely” agrees with cable operators who see IP video as the future, and “we're proactively with the videoscape architecture enabling” this, Morse said.

Set-tops have been “evolving for the past 25 years,” and “very, very small” devices that can get IP are available, said a Motorola Mobility spokeswoman. Video gateways send content “to a variety of devices,” she noted. “This is all about getting consumers what they want.” As cable customers seek “connectivity across multiple devices,” gateways “would be the entertainment hub of the home,” she said.

There may never be enough spectrum to send all the video consumers may demand to wireless devices, Britt said. “Everybody I talk to in the business says there is never going to be enough” wireless capacity for all video, he said. “That’s just physics.” Britt noted separately that Time Warner Cable and three other cable companies is selling its AWS licenses to Verizon Wireless. “Wireless broadband is enjoying astronomical growth,” Powell noted in opening remarks. He and cable executives noted that most households continue watching large amounts of TV. “We often make fun of the cable package: It seems an old thing,” Britt said later: “It’s important to remember” that about 90 percent of U.S. households subscribe to pay-TV.

Cable operators are working to meet consumer demand for more content on iPads, Xbox 360 videogame consoles, smartphones “and whatever that next cool thing is that pops out,” Powell said (http://xrl.us/bm8sip). “Cable is experimenting with more portable services, fairer pricing models and more Web integration. It is a work in progress. There will be adjustments along the way.” There’s a “place for Internet video providers to compete and complement the cable model, and some consumers may even cut the cord,” he said. “Cable benefits from the competition, and will work even harder to compete fairly and effectively.” Cable won’t be one of the “too many” other “incumbent industries” that “have failed to keep pace with consumer preferences and disruptive technologies,” Powell said.

"Critics will wail” as cable companies make changes, Powell said without identifying any particular critic. “Compelling change rarely escapes the doomsayer chorus in Washington. Rather than dismiss these concerns out of hand, we will respect and weigh them carefully.” Some of the “naysayers are carping because they don’t like the U.S. private enterprise model” of the Internet, he said. “They prefer European-style regulation where the government effectively owns or controls the network, pumping taxpayer money into subsidizing service and managing competition.” Powell in his first appearance as NCTA CEO at the 2011 Cable Show called for fewer regulations on the industry (CD June 15 p6), and Monday he noted the “light regulatory” model for broadband has contributed to its “success."

Comcast’s nixing the 250 GB monthly usage limit was “applauded” by former Republican FCC Commissioner Deborah Tate, because with it the operator is trying “new usage-sensitive plans.” Comcast, “like every other provider in the ecosystem,” is “right to be trying to utilize its facilities in a more economically efficiently [sic] manner to the overall benefit of all of its customers,” she wrote Monday on the blog of the Free State Foundation, which opposed net neutrality rules and backed Comcast against critics of its broadband policies. A tiered Internet isn’t “something to be feared,” she wrote (http://xrl.us/bm8syj). Netflix has criticized Comcast, the NCTA’s top member, for exempting from broadband data caps some of its content sent on its private managed network (CD May 18 p4). Netflix had no comment for this report.

Cable operators and programmers must keep working together for both sectors to grow, Discovery Communications CEO David Zaslav said. “We as an industry really have to come together” on the TV Everywhere initiative for operators to direct customers to websites to authenticate their video subscriptions and get cable content online, he said: “It’s important for us to put aside differences -- we always have this question over what’s the right value” for content. “We couldn’t figure out how to structure a deal where the best content came out on VOD,” which “became a valuable platform, but much more secondary,” Zaslav said. Dish Network’s ad-skipping DVR “could create carnage” and/or give the DBS company leverage with distributors, he said when asked about that company’s Hopper DVR.