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FCC Chairman Julius Genachowski is at the NCTA Cable Show this week, talking up the importance of broadband and urging operators to take steps to increase adoption of high-speed Internet services.
In a phone interview with the Chairman Wednesday, we chatted about how he hopes to narrow the broadband adoption gap, why broadcasters and distributors should play nice in their retransmission negotiations and why AllVid is still important for the future of TV applications.
On narrowing the broadband adoption gap
One of Genachowski’s mandates since taking over as Chairman of the FCC has been to increase broadband adoption across the U.S. Today, broadband services are available to about 93 percent of the country, but of the people who have that access, only about 67 percent subscribe. That compares to about 90 percent in Singapore.
According to Genachowski, there are four key reasons why that a third of broadband-eligible people don’t take advantage of the service. The first reason is affordability, but people also don’t recognize the value of broadband or know how to use a computer to take advantage of those services. Finally, there are concerns about security and privacy that come with connecting with the digital world. The FCC is taking a four-pronged approach to the issue:
- Deal with the price issue. The FCC is urging ISPs to offer low-cost broadband services to under-privileged households. The FCC made such a program one of the conditions for its approval of the Comcast-NBC Universal (s cmcsa) (s ge) deal.
- Create an online clearinghouse for broadband ideas and best practices. State and local governments looking to increase broadband adoption can turn to this as a resource when trying to find out what worked for other communities.
- Make more government services and resources available online. By moving government resources onto the Internet, the FCC believes broadband could prove more valuable to users. Genachowski imagines those services could be accessible from public computers in government offices. So someone renewing a driver’s license, for instance, wouldn’t necessarily have to stand in line for paperwork to be processed; he could simply update his information on government computers instead.
- Make government data available online for third-party application developers. By allowing entrepreneurs and startups to build apps with value to consumers, the FCC believes it can drive consumer interest in the Internet. The FCC has teamed up with the Knight Foundation to offer cash prizes to the most promising uses of government data in consumer applications.
On refereeing retransmission fights
Retransmission disagreements were a big issue last year, as the TV industry saw a record number of blackouts due to cable companies and TV programmers being unable to reach agreements on new deals. While those blackouts raised the ire of consumers and caught the attention of legislators, Genachowski acknowledged that the current statute gives the FCC few tools to intervene in the case of a blackout.
“I am concerned about disputes that end up in blackouts, because viewers are the ones who aren’t at the [negotiating] table,” Genachowski said, noting that this is a consumer issue that should be addressed. Genachowski said the FCC launched a proceeding a few months ago to explore options to deal with those disputes within its authority, and is developing a record so that it could potentially make recommendations to Congress to change the framework and give it more power to address retrans issues.
“We’ve been clear with both sides — the broadcasters and the cable and satellite companies — that we want to see deals done without putting consumers in the middle,” he said. The good news, according to the Chairman, is that since the FCC has taken those steps there haven’t been any significant retrans fights or blackouts. That said, the Commission could consider seeking more authority if that changes.
“If developments in the market show that we need to have more authority from Congress, we will ask for it,” he said. “I think what everyone in the industry understands is that they have it in their power to avoid government intervention, and the way to do it is to make sure that consumer needs are respected in the process.”
In other words, fight nice, kids — or else.
On AllVid and the rise of TV apps
About a year ago, the FCC began seeking comment on a new proposed standard called AllVid that would bridge the gap between traditional TV offerings and online services. But since its introduction, cable companies and programmers have already begun building applications based on existing video platforms. With companies like Comcast (s CMCSA) and Time Warner Cable (s TWC) already leveraging IP for distribution on new devices like the iPad and connected TV platforms, some have claimed that AllVid might not actually be necessary.
Genachowski said the purpose of the AllVid proposal was to accelerate innovation in and around the TV platform. He cited the millions of applications available for PCs and hundreds of thousands of apps available on mobile platforms like iOS and Android as a sign that standard interfaces for application development matter.
“There’s no question that in the last one to two years, there’s been innovation in the space. That’s a good thing and that’s relevant,” Genachowski said. While he admitted the industry has probably seen more innovation in the past two years than during the previous decade, the FCC would continue to “take steps to spur innovation in and around the TV platform.”