Yesterday’s opening session of The Cable Show 2010 featured a line up of cable heavy hitters in free-flowing discussion across a wide variety of topics.  Starting with the FCC’s recent decision to pursue reclassification of ISPs under Title II, moderator Tyler Mathisen questioned the CEOs about regulations, business models, consumer interests, and the future.

When questioned about the FCC’s pursuit of Title II, Time Warner Cable’s Glenn Britt and Cox’s Pat Esser both spoke to the success of broadband and suggested the FCC would be wise to keep interference to an absolute minimum.

The talk quickly turned to business models – both the delivery of products across different media, as well as how the convergence of media may result in changes to the pricing models.  To the former, Britt suggested operators should avoid thinking of every new screen as a different business, and instead focus on the industry’s true business – telling a great story via video – and thinking of new ways to meet that business goal regardless of platform.

On pricing, Esser suggested there will be open models, subscription models and transactional models, and said the goal of the operator is to facilitate them all, in a way that is easy for consumers.

The discussion of pricing led to a brief discussion of retransmission consent.  Both the programmers and the operators seemed largely unconcerned and said the process would get fixed.  However, Viacom’s Philippe Dauman did note that despite the sometimes contentious negotiations, the net result to consumers is positive.  Dauman noted that the increase in fees gets reinvested into new channels, better programing, and more delivery options.

One area where all sides seemed to agree is the role of sports and gaming as drivers of 3D television.  Asked what the adoption of 3D television would look like, Pat Esser suggested that youth and gaming would be key drivers.  David Zaslav from Discovery Networks noted the programmers push to launch the first 24 hour 3D channel as a driver.  Kevin Tsujihara of Warner Bros. spoke of the role of CE manufacturers, and specifically cited studies that indicate consumers are refreshing devices more frequently.  That, he argued, should shorten the amount of time 3D would take for adoption – especially as opposed to HD.

Britt used the mention of hi-def to note that it took 20 years for high-definition television to take off. He suggested that the migration to 3D will be guided by consumers, and said operators need to be sure to let them drive the process.

For additional coverage of this session, see The Cable Show blog.

[EDITOR'S NOTE: This week, we're all out in Los Angeles at The Cable Show 2010. Kyle McSlarrow, President & CEO of NCTA, has written the following op-ed piece, which appears in today's edition of the industry publication CableFAX, kicking off the event. I (this is Paul Rodriguez writing) actually attended the '96 conference, then called The National Show, which Kyle references below and the cable industry has indeed changed dramatically since that time. ]

The Cable Show’s return to Los Angeles for the first time since 1996 provides the perfect opportunity to reflect on the tremendous progress our industry has made since our last visit to Southern California. In fact, there may not be an industry in America that has so dramatically transformed itself so quickly.

In 1996, our distribution platform was a one-way analog system. Our platform today provides an interactive communications network that entertains and informs with tremendous award winning content, connects millions to an amazing broadband Internet experience, provides superior and affordable digital phone service and offers a growing array of interactive services that have changed the way we consume media and entertainment.

Our industry’s transformation has benefited consumers, our economy, and America’s global competitiveness. Since 1996, our industry has invested $185 billion to produce the most creative and widest variety of programming that is available; and, $160 billion in massive infrastructure upgrades, maintenance and equipment that can deliver five gigabits per second of data. And, despite a challenging economy, we continue to invest and innovate.

We should probably stop talking about the “convergence” around the corner. It is here now. Cable service is no longer just video, and content is no longer just viewed through the TV. Broadband has become a “must have,” and the Internet economy has exploded. Consumers are in the driver’s seat as they continue to witness more choice, new platforms, and optimization of their personal telecom services.

Words can hardly do justice to the myriad ways that our industry is now an integral part of life for millions of consumers. So, if you are one of the thousands joining us at The Cable Show, experience yourself cable’s impact by visiting the centerpiece of the show’s exhibit floor, My World—Powered by Cable. It’s an inspiring, immersive journey into the new era of anytime, anywhere, anyway-you-want-it content and communication. Modeled after a Hollywood back-lot, My World leads visitors through a virtual world of buildings, neighborhoods and living spaces brought to life through the connective power of our services. It demonstrates the full breadth of our industry’s ability to provide media and communications experiences the way you want it. And throughout the show floor, you’ll find more than 300 exhibitors displaying our industry’s greatest content, services and technologies

Right next to My World, CableNET highlights the latest emerging services, including ultrafast broadband, advanced advertising, interactive television, 3D TV and much more.

We’ve also got a great line-up of general sessions and panels that will tap into some of the most creative minds from our industry, Hollywood and Silicon Valley. And even though we are far from Washington, you’ll find a robust public policy program featuring top officials from the federal government and the Obama Administration.

So, welcome to Los Angeles and your world.

Regular readers of this blog may recall our discussion last year of the Selectable Output Control. The rest of you are no doubt completely puzzled.

John Eggerton’s story explains what happened: “FCC Grants Partial Waiver for Early VOD Release of Theatricals.”

[The waiver gives] studios and multichannel video programming distributors, or MVPDs, the ability to disable certain set-top outputs so they can copy-protect the release of theatrical films to VOD closer to their release date.

We issued a statement attributed to NCTA President & CEO Kyle McSlarrow:

We’re pleased that the FCC has granted MPAA’s request to permit cable customers to receive first-run theatrical movies before their release on DVD. The Commission recognized that waiving its selectable output control rule would permit cable operators and other multichannel video programming distributors to provide their customers a new service which would not be available absent FCC action. This decision serves consumers well by allowing us to provide them more choices in how and when they can view new movies.

For a better understanding of the issue, it’s helpful to read some of our old posts. We had a post answering some of the SOC waiver’s critics (including responding to the charge that SOC “breaks 25 million television sets.”). The blog Ars Technica weighed in and we responded to their response, which lead to even more discussion here.

As we move into a world of great digital distribution of content – including, in this case, the possible earlier release of theatrical films to VOD – it’s understandable that “content owners [i.e., movie studios] rightly need adequate protection against indiscriminate and unauthorized distribution of their content…” (as we put it here). The group Public Knowledge (as quoted in John Eggerton’s story above) said that SOC  “will allow the big firms for the first time to take control of a consumer’s TV set or set-top box, blocking viewing of a TV program or motion picture.”

Consumers today routinely deal with content or software that has copy protection. To describe this as “breaking” or “taking control” of your device seems over-the-top. Instead, what this hopefully means, is greater viewing options for you.

Yesterday, FCC Chairman Genachowski announced his intent to launch a proceeding exploring a new regulatory framework for broadband services.  Since then, there’s been lots of commentary from industry (including our own statement here), Wall Street analysts, and pro-regulation advocates. Amidst all the storm and fury, I want to highlight an important passage in Chairman Genachowski’s statement:

“The issues presented by the Comcast decision are a test of whether Washington can work—whether we can avoid straw-man arguments and the descent into hyperbole that too often substitute for genuine engagement.”

At NCTA, we couldn’t agree more and pledge again that our industry will work constructively with the FCC, Congress and all policymakers to create an appropriate framework that preserves an open Internet and achieves the goals of the National Broadband Plan.

But as this important dialogue moves forward, it’s critical that we at least have a common understanding of some basic facts – perhaps the most basic being a common understanding of what the Internet is.

Which brings me to the odd “rebuttal” that Free Press issued today to comments by NCTA and others on the Chairman’s “third way” proposal. It includes these phrases:

“The ‘Internet’ is not the wires that deliver the content and applications, but the content itself.”

“We trust that the NCTA will be reassured by the FCC’s repeated assertions that they have absolutely no plans to regulate the Internet.  Being the expert agency for communications, the FCC recognizes that broadband communications services are not ‘the Internet’, contrary to NCTA’s deliberately misleading statements.”

Perhaps Free Press should take a closer look at the Communications Act – specifically section 230(f)(1), which was added by the 1996 Telecom Act:

“The term “Internet” means the international computer network of both Federal and non-Federal interoperable packet switched data networks.”

Nowhere in Congress’ definition does it describe the “Internet” as being the “content” provided over the networks rather than the networks themselves.  The Commission itself cited Congress’ network-based definition of the Internet in adopting its 2005 Policy Statement on Broadband Internet Access.

Congress used a similar network-based definition in the Broadband Data Improvement Act in 2008:

INTERNET.—The term ‘‘Internet’’ means collectively the myriad of computer and telecommunications facilities, including equipment and operating software, which comprise the interconnected world-wide network of networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor successor protocols to such protocol, to communicate information of all kinds by wire or radio.

Likewise, the US Supreme Court has described the Internet as a “network of interconnected networks” (National Cable & Telecommunications Ass’n v. Brand X Internet Services) and as a “worldwide mesh or matrix of hundreds of thousands of networks, owned and operated by hundreds of thousands of people”(Reno v. ACLU).

Free Press may wish that the Internet was something else, but that does not make it true.  Let there be no doubt: When you regulate broadband networks, you are regulating the Internet.

[Editor's Note: Rick Chessen is Senior Vice President, Law & Regulatory Policy for NCTA. In addition, one sentence above was edited for clarity]

FCC Chairman Julius Genachowski said today that the FCC would start using a “third way” framework in order to regulate broadband.

You can find a PDF of The Third Way: A Narrowly Tailored Broadband Framework online. It’s also helpful to read this statement from General Counsel Austin Schlick.

We’ve just released a statement from NCTA President & CEO Kyle McSlarrow.

“We firmly believe that the case for new regulation of the Internet has not been made. Today’s competitive and dynamic broadband marketplace already operates according to openness principles that have broad industry consensus and serve consumers well. We support the goals and many recommendations of the National Broadband Plan. And, as we have repeatedly made clear, we are prepared to work constructively with the FCC, Congress and all policymakers to create an appropriate framework that preserves an open Internet and achieves the goals of the Broadband Plan.

“Given that context, the proposal to ‘reclassify’ broadband services is disappointing. We fully acknowledge and appreciate that Chairman Genachowski has outlined an approach designed to avoid the full regulatory impact of a Title II regime and that he has asked for comment and constructive alternatives, including inviting a continuing dialogue about solutions under Title I. We also understand the challenging jurisdictional questions before the Commission. However, any Title II approach is still fraught with legal uncertainty and practical consequences which pose real risks to our ability to provide the high-quality and innovative broadband services that our customers expect, thus undermining the very investment and innovation goals we share with Chairman Genachowski and upon which the National Broadband Plan depends.

“Nothing has occurred either in the marketplace or in broadband technology to change the fact that our broadband services are ‘information services,’ and not ‘telecommunications services’ that are regulated under a model designed for a previous era and for very different services. Thus, as part of the process outlined today by the Chairman, we will continue to make the case that the better course is to develop a solution that reflects the longstanding and bipartisan view that all components of the Internet should be subject at most to limited regulation under Title I.”

Here is some news coverage of the announcement.

• FCC Officials Lay Out ‘Third Way’ of Regulation
• FCC to Adopt “Title II Lite” Approach to Web Regulation
• FCC Seeks to Reclaim Powers After Losing Court Case to Comcast