Michael powell is the president and ceo of the internet and television association. How would you describe the state of the cable world today . Guest its vibrant and dynamic, which is those opportunityiic and action a period only followam technological transformation still. I think every now and then that kind of transformation and energy is invigorating and the industry feels invigorated the moment. On the operators side, theyre on the cusp of the most significant increase in dat and Broadband Speed in their history. Extraordinarily new and interesting interfaces like apps, and new forms of platforms like comcast x1 and programmers working their way through what over the top strategy should be and whatapp environments are like and theyre opportunities to innovate. Host how many people get cable today and are corn cutters inevitable. Guest churn is always inevitable, right . We have lost customers for 20 years to satellite. We want that 95 of the entire market in 1992, and thats now below 50 . Its the reality of evolution in markets and i think losing customers to new competitive alternatives are purely software and internet based is real. But what i dont liking is it turning into dooming threat and destruction. Its overrated and consumers will have many here ways to day tailorrize their content. Put when you try to cobble together a lot of kind of ayla cart or options it costs you almost as much or close it to so theres still a Value Proposition and as long as internet is the foundation of opportunities and choices that is still powerful place for cable in home. Host november 8, 2016, has president and ceo of the ncta, what was your reaction to the election results. Guest i was surprised like any other citizen. It wasnt what was hearing. We have access to Political Consultants and latenight calls be the election some what i was told it was going in a different direction. So watching returns it became clear that something wasnt adding up, the conventional wisdom, so i was a little surprised. But i have been through lots of transition in governments and president s and my Public Policy career, and while we might have anticipated preparing for one kind of political policy environment, it wasnt very difficult toy quickly reorient ourselves to prepare for a different one, one that i think at least for the industry and with the new commission actually holds opportunities for us. So thats kind of the way i reacted. Host lets bring in lydia prom bloomberg into our conversation. Host mr. Paul to turn again to the agencies to lead, duspeak more specifically about the opportunities and what change in leadership from democrat to republican mean to your industry . Guest i think our industry and be personally have a deep admiration and respect of asending to chairman championship means they spent years deep in the understanding of the institution, years understanding the issue, so it things can start happening quickly. Its not a lock leadership training, learning curve, not a lot of getting to knowow and learning the staff and how the agency works which can take six months of just getting things rolling and things roll because theyre familiar. I think that the commissioner the chairman is more in line with most chairmans over the last 0 years. Think he 20 years. He has a very committed understanding that both infrastructure and providers are of equal importance in internet and that to be reasserted is valuable and understand the country needs needs the internet infrastructure to evolve just as aggressive his as snapchat or facebook and if you want to realize your greatest ambitions about what is possible on the internet, innovation has to be a concept not revengerred just for edge providers. Its a concept needed for internet. Think he is a visionary. I think he is very focused on the concept we have heard for many years, with the exception of he last commission, about light touch. The understanding this market moves at breakneck speed. A huge amount of futility to some of these regulatory proceed examination by the time hair over the market has shifted radically. That businesses dont have the luxury of sitting on decisions for six months and eight months and a year before they have to make decisions, and i think the new commissioned i committed to that speed of action and the recognition of a lighter touch in this environment. So, all we ask for is a fair environment that recognizes those dynamics, ininvestment, innovation, light touch, and the recognition of the importance of infrastructure to the information action. Host to drill down into one of those regulations, broadly speaking seems theres a hyperpartisan discourse in American Society in terms of the capital hill and Net Neutrality is port of that . What is ground. Guest common ground. Guest this is a deeply frustrating aspect of this debate. If you want to understand it well you should divide the commissions actions under chairman wheeler into two decisions. One was to protect the open internet. This is the most important thing. On that i would authorizing isnt a partisan divide or a disi agreement about the importance of those values ongoing and continuing. And a second decision, which to me was more substantially described as a power grab in re laughing carriers under common carage and communications law, and the commission would have hand unwounded amount of authority to regulate the internet in ways they had not before. That part of the digs is highly conflicted and highly controversial, and i think highly unnecessary. And i think that is what is confused the debate around Net Neutrality and allows people to on few says the fact there obfuscate they fact there is very little different between anybody in the Community Versus ongoing commitment to an open internet and as a tactic used by those who would prefer different models to changes the two decisions into one and suggest that one is the functional equivalent of the other. Whether its senator thune, who talked about the importance of protecting the core elements of Net Neutrality and theres advocacy which has been consistent for years. The only thing we hey if thrown a hissy fit about is the radical decision to change 20 years of telecommunication policy that has been bipartisan supported not to regulate the internet using 1930 others and 1940s communication models and that is the thing that the commission insisted on doing that led to the hottest part of the controversy. Think as we go forward, that is the part we should really be focusing on. If we want infrastructure deployment to increase and wasnt Rural America served and what 5g potential, which lies on investment, then we should use regulatory models that dont retard that and common carriage was a mistake, is a mistake and will be the major obstacle to those ambitions. Host do you see a return to powell doctrine. Guest that belongs to a general powell and his is must more host yearsyearsyearsyears ot neutrality. Guest if have been extremely proud when i was chairman in 2004 and 2005, i gave the first speech that talked about Internet Freedom which is walk about as open internet or Net Neutrality. This is my point. Could assert the importance of that when i was the chairman that classified internet services. The unking that was the compact and the Internet Community be lightly regulated to innocent them to move from infrastructures to this new one and enjoy the blessings and the law that brings but had to stay cognizant of the open to the consumer. This right of the consumer to do what they want. Over the cheers chairman have change egged, out in for the better to make it for the producers. In the neutrality wars are not consumers. Theyre about different sets of corporate interests who what advantages or disadvantages immigrant posed on the other through the use of rules. This is now about netflix and comcast, or a startup and another company. We have lost sight of the fact the rules were originally conceived is it the right of the consumer and i think on that, i hope we are continuing to be committed to that and i know in my industry theres an unshakable commitment it to, not because were goodheart evidence people. Its because it makes the most economic sense. I used to ask chairman wheeler and pass commissions if we are so inventive to block or champ for prioritization or throttle, whit did be never do this . Never a compelling strategy. It isnt a compelling strategy. Its hostile to your customers. Hostile to your network economics. And what we will continue to do no matter what the rules are. Host to look a little bit the future of your industry, charter and comcast have invictoried the wireless Spectrum Leasing agreement with versus verizon and there are lot of opportunities there for cable to go back into the wireless space, but what can is this going to be a game changer for the industry and how can cable compete in an environment where the wireless carriers are offering unlimited data. Ill key off something you said. Go back into the wireless world. I thought about that this week. One of the biggest things we have to chapping in our thinking is that wireless and wire lined are distinct. They no longer are. 70 by 2021 of all Cellular Wireless traffic will be moved over wire lynn instruction. The future of 5g depends 0 whether theres wifi integrated into the system and whether the fixed wire line brand broadbandcast is there. Our industry deemploys over 100,000 hot spots. A huger percentage what our customers does over wireless structure, either out of the home or in the home. We are already the Wireless Industry and have been for quite a long tom. I think we are still living in the 19961934 bucket way of thinking about the world. But comcast and charter and cox and other companies are as much Wireless Companies as anybody. The only thing they have not been custom marrily is an custom marrily is owner of selling handsets to consumers. They have orb phones and ipads that use wifi but not at a product offering. So theres some discussion of them going back into the market because they have to much invested in the wireless component anyway and consumers place a premium on mobility, and you look the great creators in Silicon Valley and software folks, almost everything being made is a mobile application. The thing interesting is whether its snapchat and its recent ipo or facebooks Revenue Growth from mobile or everything has to be mobile. Its actually just completely natural for our industry to continue to expand its understanding and its place in the wireless space because they cant really divorce or distinguish it from their fixed business anymore in a meaningful way. Host back to the future scenario. Guest yeah. Yeah. Perfect. Host well, you mentioned a really important subject there, infrastructure. Everybody wants broadband to be a component but its unclear what the pill will look look and not even clear that Something Like senator thunes bill will get passed. What can the industry do on is open or with the ftc to get the infrastructure it needs in deployment. Guest i think this is a long overdue debate. Infrastructure for the nation generally. I think that there have been many decade of lack of good focus on americas critical infrastructures other. I eve ban propped if you compare most of the critical infrastructures to the one wore involved in, the difference is night and day. We geoff roads and bridges and sewage and wart systems dplus, dmine new grades in america. No attracting capital. Crumbling infrastructure. The beauty of broadband is its been a stellar growing in comparison to those. Its not a crumbling infrastructure. It attracts phenomenal amounts of private Capital Investment and grows in output and value to consumers, gets better and not worse. Let not cop fuse the two. While we confuse the two. Lets not talk about broadband as the same problem as roads and bridges and water and use the same kind of governmental intervention. Rural infrastructure is always been a problem and always will be because of the fundament uncomment nature of the last five to six percent consumers. 90 of the america is classified by the ken cuss census bureau. Its a massive country, swaths of country, a very expensive sum cost network, and we never shied away from the reality that you basically have to make what is uneconomical more economical and that can only be done in two wheeze, either radically lower the cost or reduce service. In terms of reducing cost one thing i hope people will be more thoughtful about we have many nor Network Tools in the toolbox than wed used to have. I dont think these programs are thoughtful enough about whether satellite is the solution, stop pretending, its wire, broadband, wired broadband is never going to make economic sense to reach homes 600 miles apart in a mountainous region, satellite, should figure out how to invest and use satellite because the costs are much low are than this or mobile wireless or fixed wireless. More sews fix tick indicate sophisticated about the technology and more disciplined in our financial programs where to put the money other. Ive been through this 50 teams and every time we turn ron money will always try to creep back to the part of the market that are semi smoke. Economic. We have underserved instead of unserved. Communities with braun that the government was able to support and the government overbuilds and calls it competition. Communities who have nothing, zero broadband up, zero braun down, remain unserved because too much of the money got acreted to the other. My belief as a citizen and Telecom Expert is that nobody should get to eat until everybody eats once and a lot of america is waiting for the first iteration of the solution and money is created off and people have eaten once. 0 serving unserved is important. I think what institutions we use to manage the programs are important. A long history of support programs that have been very tied into one particular technology or the other. Im not a big fan of the rural utility service, not because theyre bad people or havent done good work but a tightly it in hulk of infrastructure, and win that, thats money that guess to rural telephones but there are major and important broadband privilegedders who should have better access to compete for those spaces and the last thing i say is the ftc is a terrific institution for the issue, as it has always been. Woven deep into tellcome law is upick and i remember being hauled into the office to be remind thread alaskans in the middle of the most rural and desolate pants of the environment who have to be on the network, or in hawaii, and theres not a chairman or a commissioner ive ever met who has not nope that one critical part of the obligation is to work that problem. Would commend the Wheeler Commission and the commission before it to look at ways to shift money toward abrupt, toward the problems. Toward use of new technologies or wireless funds, funds more i think all of that is very thoughtful and on the right track and if i were congress i would continuing to work with the ftc to solve the problem as ofoesed creating a new institution. Host given the economies of scale do you see further consolidation and maybe some crosspollination in the industry to get this buildout . Guest i dont think consolidation of scale or the explicit purpose of more economically serving rural parts of the country is necessarily in the offing. If anything you see a lot of major wired Infrastructure Companies reordering their portfolio that way. Meaning the phone companies who verizon have been selling off fixed lines and diversifying businesses into other spaces. Dont know whether consolidation were seeing today or consolidation we might likely see tomorrow will necessarily tell us anything about that particular issue. Think the consolidation that has been taking place has been an effort to be more strategic, and to be more diversified. So, all of us sit on businesses all under stress from one thing or the other. Natural for an industry and a company to look to diversify Revenue Sources across the digital ecosystem. Im sure that verizons argument for aol and yaw here 0 at t at for direct tv and time warner, its part of the charter thesis. Everybody knows they have a whole lot of experimenting to do. Right . And whether you subscribe to narrative or not, Randle Steen Stevenson will tell you the experiment with content and wireless products and others tell you a story of innovation and narrative through core bubbles using a combination everybodying tries gnaw and novel combinations combinationsr merger activity to strategic to having the assets to use that. Host new and novel. Time orbiting the ftc, combine some bureaus and get rid of some bureaus . Guest my theory is every new chairman, i think, is not only a policy wonk, they are an administrator and i think they are a ceo and i think they are as much responsible for the morale or the great men and women who work there and the organizational strength of the institution. People forget the ftc is a big play, close to 2,000 people in a pretty serious budget. So, we dent get to see the ftc chairman in his office going over the budget and going over the staff and going over the pay and all that. And this particular one is going to have to move, which is going to be pretty complicated, having been through a move won i was there so i would hope theyve would look at it. Its part of their responsibility. Making sure it maps with the marketer is always important. Used to all say a slightly different way. Should map with the market as seen through the eyes and ears of consumers. When i talk to neighbors theyre almost perplexed the way we talk about it they dont seen a difference between broadband and facebook youch take an issue of privacy, what the commission did is it pretend the consumer things of these two things separately. This isnt separation. If i said to my son are you going to get on the internet, the internet to him is a combination of the thing that makes got and the thing he goes to. And to act like in policy those are regard live distinct things through the us of consumer ising wrong. So if you can reorganize that aligns better, that it should make policies that make more sense. I think theres probably room for that over there. Host you mentioned stress factors for industry groups. Guest a lot. Breathe. Host well, for your industry there was a report out in february that there could be a spectrum crunch for unlicensed spectrum, maybe in the next ten years or so. Weve heard about a special crunch for their Wireless Industry for many years, but not so frequently from unlicensed user and there are many different types. What does that prediction mean to you and what can be done about it . Guest i think it starts off with i think were almost there. Almost. With the country and the policy understanding you have to have a balanced spectrum policy because both licensed and up licensed are indispensable in any vision of the future, which is why you find really powerful crosssections oft interests. The second thing is of if you are watching the pace of things happening on the revolutionaries chessboardure starting to see the explosion of things that count on wifi as their foundational use. So you cant have an internet of things revolution minus why wifi. You cant have a revolution in the ethics of awe ton news driving autonomous driving d. So unlicensed spectrum is in a critical way the information electric grid, the way the things plug in, and so the crunch, if we call it that, is coming because of the proliferation of those thingseses expanding rapidly. In the average home today, the average consumer has between five and seven i would tie wifi editions on all the time and devices they dont know are on the network. Your tv this thermostat is on the network. So, the government will be required forever to be thinking about how do you make that band work better, fine more spectrum. I think one thing i always my whole career ive heard theres a spectrum crunch. Doesnt matter what year or who it saying it, theres always saying it. Why . Theres an inappetite. You have to find more spectrum, contiguous usable spectrum, you have to get better at sharing. There just is not ever going to be a in my opinion a enough spectrum the ftc in the closet to solve the voracious appetite of the divisions. We have to get better that im using this spectrum and so is lydia and so is peter and the devices all of us are going create the behavioral and technological rules for that to happen. Theres not enough to give you a full plate, you a full plate, me a full plate and doing that together. Sharing is krill cal and also technological required because 80 of the spectrum is not used all the team. Theres spectrum in this room right now but wering in using it. Sitting idol. And then another thing that is never often nerve often never talked best is the people who write software have about the to make the uses more efficient. My son is a software engineer. You can write a piece of programming that is bloated, takes up a lot of bandwidth and you can rite it another way and its effecter. Its like netflix. The huge part of why Netflix Streaming is good and goes up to 4k is because they have done a lot of very Good Software engineering to increase the al go rim of complexion algorithm of come appreciation and allow Higher Quality to come through smaller spaces you. Cant say just make fatter pipes over. The Software Industry and the key sign industry have to get better and bet examiner better at complexion and Software Design so that they can do more and n less space, and i think everybody has to play that role. Almost never do you hear people talk about the incentives to get people to design more efficiently. Right . Its just get a bigger pipe and let them waste as much of it i think thats an error. Host finally, michael powell, your Industry Trade show is cancelled. Why . Guest i love the trade show, and so did everyone in the cable industry. It was 60 years running. Think it was a good one and i think a great center for us. But as we went through our rebranding exercise white do you go through the exercises in because the world is changing and its changing in meaningful ways and you want to rehigh loin your storytelling or narrative and realign to be more in tuned with your industry. And i think theres a place for some Kind Industries and some kinds of products to have Massive Convention floors with big exhibits. But there are a lot of other creative venues that people are using. We have watched recode, south by southwest, back in the all thing digital days. The ted conferences. Theres been a real innovation in the last 15 years over conferences, over thought leadership, over display and demonstration that are really interesting. And so i think it was somewhat courageous for our board to say, lets be done with this. And lets take what has been a lot of money and effort and look for fresher ways, mow transactional ways to tell our story and realign our messages. So this conference, which were very excited about, the near future, is just a halfday conference in washington but intended to really sort of post late from tower visionary from our visionary perspective what is happening in the future and why the services we provide will be a critical subcomponent of that happen and its not ceos on the stage telling the story. Its people doing cutting edge vr and new forms of storetling, Autonomous Vehicles and letting us hear from them their visions and network. So were sort over excited about that and thats the reasoning, and it freeze us frees us up to think more creatively about where to be and when. Michael powell is president of the internet and television association. And lydia covers tech for bloomberg. President trump sent out a tweet today supporting the republican healthcare law replace. Plan, saying obama car is imploding. It is a disaster and 2017 will