FCC sticks to open internet and more competition at INTX

If the cable industry was looking for any breaks, the Federal Communications Commission made it clear it should not expect any.

Tom Wheeler, the former cable-industry lobbyist turned FCC chairman, took on the industry at the annual television industry convention in Chicago and sent a strong message to cable executives not to stifle competition, especially when it came to internet service, during a keynote speech that visibly did not go down well with the audience.

"Your challenge will be to overcome the temptation to use your predominant position in broadband to protect your traditional cable business," Wheeler told the crowd. "The Internet will disrupt your existing business model. It does that to everyone."

He urged, "More competition would be better."

According to commentators, his address before the National Cable & Telecommunications Association came at a crucial point for an industry trying to gauge how far they could go with regulators.

Only weeks ago, the FCC and US Department of Justice struck down Comcast's $45-billion takeover bid for Time Warner Cable (See: Comcast scraps merger agreement with Time Warner Cable), while AT&T's $48-billion offer to acquire DirecTV, awaits the FCC's nod (See: Netflix urges FCC to reject AT&T, DirtectTV merger).

With the deal, the combined company could become the US' biggest pay-TV provider.

But top cable executives seemed to be unfazed and in a panel after Wheeler's speech appeared bullish about a wave of industry consolidation.

Wheeler faced a hostile audience as he made it clear he would not back down. He said blocking the Comcast takeover of Time Warner Cable was the right thing to do and so was the proposing the use of Title II to assert authority over broadband.

Wheeler said the Commission wanted to evaluate the retransmission consent situation, which many cable operators felt was broken.

Wheeler further said the FCC wanted to ensure that cable operators did not face unfairly excessive rates for pole attachment. ''My expectation is that the recommendation will be to FCC to further align cable and telecommunications rates,'' he said.

He added the FCC was looking at expanding the definition of an MVPD (multichannel video program distributor) to include competitors who did not own and operate their own networks – a move traditional cable operators would likely oppose, but which he said he favoured.

However, the audience largely felt betrayed by the FCC's Open Internet Order, which reclassifies broadband under Title II and subjected the industry to a new regulatory regime remained unimpressed.