‘Barreling Toward’ All-IP Networks, Heller Worries About Capacity

The blame isn’t “fully at the FCC,” as Congress and the Senate Commerce Committee, of which Heller’s a member, need to look “to see if it’s time to crack open the code,” he said. FCC process reform, among the subjects of the committee’s hearing Tuesday (CD March 13 p5), is needed for the agency “to act with more dispatch,” Commissioner Ajit Pai said later at the ACA conference. He also endorsed broadband usage-based billing (UBB).

That requests can remain pending for many years at the agency “is not good government,” nor is it the “fault” of Chairman Julius Genachowski or any FCC chief, Pai said in a Q-and-A with ACA CEO Matt Polka. “There is so much on our plate, and it is difficult for us to focus on the smaller items.” He cited the FCC not acting on a 2012 ACA petition for the commission to redo some emergency alert system rules to give small operators an easier time showing they don’t get broadband at headends and so can’t get warnings in the newer Web-based common alerting protocol. “As sometimes happens on the FCC, we didn’t act on it before the deadline ran, so the rules went into effect, and your petition was dismissed as moot.” Some “tweaks” to the EAS CAP rules could have helped smaller operators and kept to the spirit of the rules, Pai said. ACA had asked the agency to dismiss the petition, because it wasn’t acted on before a 2012 CAP EAS order took effect.

Pai generally has no problem with UBB, he said. “There are going to be some unintended, some unpleasant” things if such ISP billing of residential broadband subscribers isn’t allowed by the FCC, he said. “Those people who are a little more frugal in what they eat are going to end up subsidizing” those who eat more, if the agency should switch tack and not allow the billing, Pai said: “This is an area where we have a pretty competitive broadband market in most of the country, so now is not the time for the FCC” to get involved. Pai repeated his call for any rewrite of telecom laws to allow the agency to grant cable forbearance, that joint services agreements and other resource-sharing deals between TV stations allow broadcasters to get efficiencies of scale to invest in news reporting and other business endeavors, and that the commission has little authority to prevent blackouts of TV stations on multichannel video programming distributors when retransmission-consent talks break down. Retrans continues to be a major focus of ACA members’ lobbying, said Polka and the group’s chairman, WOW CEO Colleen Abdoulah.

Pai and Heller said they've heard concerns about retrans from MVPDs of all sizes. “So rest assured, this issue is on [the FCC’s] radar,” Pai said. “Our authority is relatively circumspect” because the law only allows the FCC to ensure parties to retrans contracts negotiate in good faith, he said. The agency hasn’t done very much to flesh out what good faith means, apart from a 2011 NPRM, Pai said. “Our hands are tied at the FCC at least, so I think it would be important for Congress, in consultation with industry, to make any changes.” Apart from legislative limits, part of the agency’s problem “is we aren’t in the room, so to speak, as these negotiations are happening,” Pai said. Even if the agency got such real-time information, by the time it was analyzed, “it would be out of date,” he said. “If we're going to give meaning to the good-faith standard,” the agency needs a better idea of what’s happening during retrans talks.

As Congress looks to reauthorize the satellite home-viewing law expiring next year, “it’s inevitable that” retrans and compulsory licenses, which allow MVPDs to carry copyrighted content without getting permission from every rights holder, will come up, Heller said. “We should have a broad discussion on the future of video in the Senate Commerce Committee.” The Communications Act “in general is outdated,” with “silos that place phone regulations in one cylinder,” cable regulations in another and other regulations elsewhere, he said. “In an IP world, everything is now interconnected” with “new, innovative companies” that largely go unregulated and other, traditional ones which are regulated, “and they're doing frankly exactly the same thing,” Heller said. Both cable and online-video content is “video piped on my screen for me to watch,” he continued. “However, one is regulated, and the other is not."

CES showed Heller some of the limits newer technologies may bump up against because infrastructure may be expanding less quickly than the needs of devices, he said. At January’s show in Las Vegas, he was told that “cable boxes will not exist in the future, at least not as they do today,” since all TVs will be Internet-connected, Heller said. “I don’t think we have enough broadband infrastructure to facilitate 250 million Americans all streaming the Super Bowl at the same time.” The question is “what are we going to do about it,” Heller said. “And the answer is, not enough” is being done now, he continued. “And the stakes are high.” FCC rules bear updating partly because of over-the-top video’s entry into the market “in a way that I don’t think anyone would have anticipated 10 years ago,” Pai said. “To the extent that American consumers are demanding content when they want it, and where they want it,” the commission should try to update its rules, too, he said. The approach of Rep. Steve Scalise, R-La., is “a very forward-looking” one, Pai said. Scalise is scheduled to speak to the ACA conference Thursday at 7:45 a.m., an association spokesman said.

There are limits to how deeply online streaming functionality can be meshed with cable operators’ video service, ACA board members said at a luncheon with reporters. They cited technological issues preventing the broadcast-TV streaming service Aereo, which TV-station owners are suing to block, from such operator integration. Content owners also limit how operators can use their online-streaming services that authenticate cable subscribers viewing the programming from their own devices like tablets, executives said. “Aereo is having some issues now,” Abdoulah said. WOW would be interested in considering the inclusion of some content from Netflix in its service, but the streaming-video company’s contracts with content owners don’t allow it, she said. Apart from any of Aereo’s legal issues, ACA’s vice chairman and president of Ohio operator MCTV Robert Gessner said he’s “not aware of any way that you could integrate the IP-based” service’s signal with cable’s plant.

MCTV and Wave Broadband’s interest in more access to TV Everywhere-like cable-channel subscriber authentication services from programmers is unmet, said Gessner and Wave Chief Operating Officer Steve Friedman. “The programmers aren’t allowing the authentication technology to be developed into a standard that we could apply” and integrate into operators’ video service, said Friedman, former ACA chairman. “There’s no reason” not to allow such integration, he continued. “We can do that,” and programmers “can come and look at it and make sure it’s OK,” he said: “They're coming to us last, to let the big guys go first” by deploying such services.

To Gessner, “the problem with streaming rights is content owners look at it basically as leverage to get the consumers to keep the basic-cable package,” he said. That means cable subscribers still pay for bundles that include channels they don’t watch, online or on TV, Gessner said. “It’s not really a product. It’s just bolted onto the package to keep people where they are.” Most U.S. content providers “look at the consumer as an annuity” and are “patient” about it, he said. ACA members during this lobbying trip to Capitol Hill and the FCC are telling officials about concerns on program access rules and increasing programming costs, Polka said.

"There’s real potential for this being a busy session” of Congress, Heller said. It’s a “reasonable question” whether “consensus can be reached” on spending issues, and “there is only one way forward” of bipartisanship, according to the senator now in his first full term who said his “constituents at home would not allow me to” trade in “my conservative credentials.” He’s nonetheless working “to find common ground,” as “the essence of getting something done is toning down the rhetoric.” The split between “common ground” and disagreement is about 80-20 on issues, Heller said, so “to move this country forward, both sides have to come together.”