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Ex-FCC chief takes digs at government regulation, Trump (Q&A)

Michael Powell, who now heads cable's most influential trade group, feels his industry is under regulatory assault.

Michael Powell, a former FCC chairman and currently head of the cable industry's biggest lobbying group, is frustrated.

NCTA President Michael Powell addresses the cable industry at the group's annual trade show last week.

Marguerite Reardon / CNET

Cable companies have been "increasingly saddled with heavy rules without any compelling evidence of harm to consumers or competitors," Powell, president of National Cable & Telecommunications Association, said at the group's trade show last week in Boston. He pointed to proposals to force more competition in the cable set-top box business and to regulate privacy for Internet service providers as evidence of "tectonic shifts that have crumbled decades of settled law and policy."

For consumers, he said, these regulatory policies will lead to higher costs as they are encouraged to buy set-top boxes no one wants. Meanwhile, the privacy rules leave out the biggest companies, such as Google, Facebook and Amazon, which are already collecting and selling sensitive information about consumers. Proponents of such rules argue that consumers will ultimately have more choice and lower prices.

CNET sat down with Powell to talk about the issues facing the cable industry. He offered his candid views on the Federal Communications Commission, as well as his thoughts on the presidential campaign. Below is an edited excerpt of that conversation.

Q: You said the FCC launched an assault on the cable industry. Do you think the FCC is picking on cable companies?
Powell: It's not that they're picking on us. But regulatory agencies set priorities. They establish visions that guide their agenda, and what I see emerging is a very pointed view that the Internet communications ecosystem is increasingly perceived as bifurcated rather than being seen as a virtuous ingredient of what drives Internet growth. Instead [cable companies] are considered a barrier or an impediment to that.

Let's talk about the FCC's set-top box proceeding. The FCC wants to allow third parties to offer boxes so people aren't forced to rent one from a cable operator. I've never understood why cable companies would want you renting boxes from them anyway.
Powell: They don't. It's because of the box that we have to send trucks out to your house so the guy with the blue booties can come in and install it. We know the real pain point for us is when you move and have to return a box to a crummy retail store and have a bad experience. It's interesting that the FCC talks a lot about the revenue of the set-top boxes for the cable companies, but the commission didn't talk at all about the expense.

So why do I still have to rent a box from the cable company?
Powell: You could buy a TiVo right now. By the way, most of the models that have survived, like TiVo, include subscription. TiVo is way more expensive than leasing a set-top box from the cable company.

The truth is we want to be on all kinds of devices: iPhones, iPads, tablets, Rokus, Apple TVs. Our disagreement with the FCC has nothing to do with getting on third-party devices.

But they want to create a market for competitive boxes. We want to create a market where everything is a box. And we're already doing it. Time Warner Cable and Charter have already built fully integrated cable apps. Comcast has already announced their fully integrated cable app. Those apps are going to be capable of running on Roku, Apple TV, iPad, it won't matter what the device is.

The cable industry is opposed to the FCC taking over privacy regulation for Internet providers from the Federal Trade Commission. What are your objections to this approach?
Powell: There are a lot of nuances in privacy for Americans. Some people will give their privacy away if they see value in it. So protecting privacy is not an easy one-size-fits-all solution.

The FTC's process responds to harms that evolve with learning. I think it's a superior approach to the one that the FCC is forced to employ, which is, 'I'm going to type out a rule and put it in a rule book and then enforce against that rule for the next decade, no matter what happens in the marketplace.'

When you have markets move as dramatically as the Internet does with as much experimentation and risk-taking that's required, prophylactic rules in a rule book can be problematic because they don't breathe. You can put a rule in a book and it takes 20 years to get it off.

All we're asking is for the FCC to harmonize regulation with the FTC.

You come from a prominent Republican family. Your father, Colin Powell, served as secretary of state, chairman of the Joint Chiefs of Staff, and national security adviser. What do you think of Donald Trump?

Powell: I think it's an interesting phenomenon. I don't know Donald Trump so I won't speak personally. The way I was raised as a public servant I have a lot of difficulty with how he has styled his candidacy. As a person who grew up in a family of public servants, I have a deep belief in civility and a deep belief that you fight with ideas and not emotion. I have a deep belief that your client is the American people, not yourself or a party or anything else. I believe in a society that will only thrive through inclusion, not division. And I think leadership is about trying to connect the better nature of people and not profit from the worst nature in people.

I won't just make that comment about Mr. Trump. The political system is letting us all down. Somebody once told me that the way most people vote for president is they want the person who exhibits the qualities that they wish they fully were. You should want them to be better.

There was a time when people in the Republican party really wanted your dad to run for president. Some still do. Anybody in the Powell family thinking about politics?
Powell: At the moment that answer would clearly be no. I can't speak for my dad, either.

I don't know why he doesn't run for president, but it's a system that at the moment isn't encouraging people like him to run. I can name you lots of people I admire who should run for president. We should be worried as a country that a Colin Powell or Bob Gates or a lot of other people I admire don't want anything to do with this. If you have a system that elects the most powerful person in the world that people are being repelled by, something is wrong.

What do you think a Trump or Clinton presidency would look like for the FCC?
Powell: It's anyone's guess. He doesn't have a history, unlike Mrs. Clinton, who has been in the business a long time. There is an orbit of people around her who have expertise or interest who have been around that machinery for decades. I could guess at the kind of people who could be involved.

Would a Clinton FCC be similar to Obama's FCC?
Powell: The thing with Obama's FCC is there were actually twin commissions. Julius Genachowski was one kind of guy, and it was a very different approach and tenor. Then there was Tom Wheeler. I don't think it's the president or the ideology that is that determinative.

Trust me, I can find a lot of Democratic constituencies that were happy with rulings I made. And I can find plenty of Republican constituencies that didn't like what I did. It has a lot to do with the individual you put in the main chair and what surrounds her or him. That will determine the dynamic so it's hard to say.