NCTA's Powell: Closing Digital Divide Won't Happen This Decade

Powell announced in February he was retiring from NCTA (see 2502270049). Former Colorado lawmaker Cory Gardner takes over as CEO on Sept. 22 (see 2509020008), a role Powell has held since spring 2011. He was appointed to the FCC as a commissioner in November 1997 and served as chair from 2001 through March 2005.

In a sit-down interview with Communications Daily in his NCTA office in Washington last week, Powell discussed the big issues facing the cable ISP industry, his legacy in the communications policy space and his belief that BEAD won't close the digital divide in the next few years. Doing so even in 10 years "would be a hell of an achievement," Powell told us.

The following transcript was edited for length and clarity.

CD: What are you telling your successor, Cory Gardner, that you see as the big challenges and the big opportunities for the industry and for NCTA as an organization?

Powell: He's inheriting a fantastic organization, which I have no concerns about whatsoever. There's a tremendous team here who's well versed in all the things he's going to be worried about.

From a policy perspective, there's just no question that spectrum has become a very central focus of NCTA. We're not "the wireless association," but we might as well be these days. Our companies have found a toehold in adding to their bundle and their product suite in wireless. So spectrum is a critical asset to us, too. And so part of Cory's challenge will be a lot of government that still needs to be brought along in its understanding that while spectrum's really, really important to wireless and mobile service providers, they are just one of many consumers of spectrum, and you can't be myopic about their demands, right? More Americans are more dependent on Wi-Fi by a huge order of magnitude than they are on their mobile cellular networks. What's the equivalent of the electric grid for the information age? I actually believe it's Wi-Fi. That's how the internet economy runs, right? What's an Apple iPhone without Wi-Fi?

I think sometimes people run away with these 5G stories. I think there's a part of what [the wireless industry] asks for that's fair and a part of what they ask for which is overwrought and not in the country's best interests, even if I put aside our self-interests -- which we have. But I think this country has to have a very balanced spectrum policy to be an innovation leader.

The next thing for me would be ... the continued effective implementation of BEAD. Our companies are clearly significant bidders, doing well so far in the selection process. We're going to build out rural America, something we all want to do, all dreamed of doing, if it's done right, which I still think there are some open questions about.

Then you have a deregulatory environment. I definitely think we're going to be in a period where people are looking to remove the underbrush of regulations for all industries in different ways, and a lot of that will be good for us, [while] a lot of it won't, if it's done wrong.


We don't want pro-broadcaster policies to turn into excessive retransmission consent leverage, right? We're just in a world where I think [the Telecommunications Act of 1996] has lost most of its currency.
 It's just hideously out of date. Most of it doesn't even make logical sense anymore because the products and services and technologies that are operating today were not contemplated in the body of the statute. And when you try to apply those rules to the way the current market actually works or the way broadband works instead of a telephone network, it's more than gray. 
I think it's in hospice. So people are working around it, and now, why not deregulate, because most of it doesn't actually do all that much.

Lastly, I would say the world of AI is both fascinating and terrifying, and I don't think we know yet with real clarity where we fit in that big ecosystem. But both the regulatory and policy developments there are going to set the pace for the next 75 years, and no industry can afford not to be at that table. 
I think the tech guys dominate that room, and so it's a hard room to stay current in. But if I were staying, I would be focused very heavily on that.

CD: Is the Benefit of the Bargain version of BEAD better for NCTA members than the original version?

Powell: Every company [participating in BEAD] is sitting there with some kind of Excel spreadsheet model [that] starts from the premise that rural broadband is uneconomic. That's why they're not served. It's not because people are hostile to serving them. It's because you can't justify flat-out losing money.

BEAD is kind of a subsidy. But then there were a bunch of [BEAD requirements] that if you start adding, [they] just keep raising the costs and taking you back down the "this is not economical" road. The work that's been done to kind of punch some of that stuff out, or change the way some of that stuff is interpreted, has been positive. For many of our companies, it turns areas that were red to green, and they're back in the game in places I'm pretty sure they weren't going beforehand. I think the slight deemphasis on fiber is good for us, but it's also meant to be better for satellite, so it's a double-edged sword in some ways.

We have always been strong proponents that the fiber thing is a mythical debate. You shouldn't care what technology somebody uses to provide service. 
If the function of the service is effective, the speeds are effective, why do you care what they put in the ground? I even say that about satellite: "Good, let them come to the party." There are places where I think satellite is the only thing that makes sense. I have always said the country should look at the last 1% to 2% [of unserved areas being appropriate for] satellite. But if you're a senator from a rural area, and you think New York has fiber, you think you should have fiber.
 I have seen that my whole career, this kind of policy-by-envy thing that isn't always the right answer.

I have seen [several] major broadband subsidy pushes in this country, and I have seen most of them fail. And they usually fail for the same reasons: They let people over-build. These companies are always going to want to cheat their way back to markets that make sense. It's just what they will do. If I can get away with being in the center of Butte instead of the outside [hinterlands], and now I have customers and revenue, they'll do it.

CD: If we were sitting here talking five years from now, is the digital divide not closed in this country? 


Powell: It won't be closed in five years. I worry that this country is just so impatient all the time that they let the perfect be the enemy of the good. These are decade-long projects at best. We should just be honest about that. Everybody knows it. The idea that in three years you're going to close -- everybody dreams that somehow we're all FDR and this is rural electrification. If you go study the history, there's nothing about this that looks anything like FDR and the rural electrification project. We would all be better off if we reset our expectations, and then we didn't make hasty choices because you wanted it in three years.

CD: Is retrans reform ever going to happen? Does NCTA even care that much anymore, given cord-cutting trends? 


Powell: It doesn't have the place that it might have had five or seven years ago. Do I hear about this issue a lot anymore from companies? Not that much. But there is a certain vigilance about what the other side is up to. And I don't think about it as the rules of retrans as much as whether leverage gets out of control. 
You see [broadcasters] wanting to eliminate consolidation rules and get bigger and bigger, and that starts to make people nervous around the relative leverage. So, broadcast ownership is retrans [and] network cap is retrans in the way that retrans has become shorthand for things that upset the relative balance of leverage. The retrans rules themselves are sort of goofy and, 
I'm not going to say irrelevant, [but the FCC would] be happy to see that stuff go away.

Broadcasters, God love 'em, but that's a bunch of spectrum doing nothing. It's prime broadband spectrum, and we have created some special space for a service that basically wants to be carried on cable while nobody in this country is watching it [over the air]. So, then we have spectrum fights over tiny increments of spectrum somebody's trying to pry out of the DOD, who uses it for Aegis cruisers, when sitting over here are 700 MHz. It's always been a kind of incongruous thing to me. But nobody's going [to get into that reallocation fight]. It would take some big chutzpah.

CD: Is this retirement, or is this retirement as in doing something else?

Powell: I have a lot of things I want to do. And I don't golf, so that answers your question. It's just about where I want to put my energies, and I have some things I'm really committed to already. I'm not looking for another 9-to-5 job, though. It would have to be awfully special to convince me to really do that kind of work again full-time.

But I'm really interested in things that are impactful on things that I care about. I'm not going to go set up some telecom consulting shop and show back up. That doesn't really interest me. I've spent my whole career in the space. I love it. [But] it's time for other people to figure stuff out. Does that mean if somebody invited me to something that was important, would I show up and talk?
 Maybe, but it is not in my instinct to be out there trying to monetize telecom experience. Would I be on the board of a company in this space? Probably, or something like that. I'm not going to be a Washington fixture; that's not on my list. 


CD: As you look back at your NCTA and FCC legacies, what do you think you've accomplished?

Powell: I think people are surprised how little I look back and [say], "Oh, look at this important thing I did." I just loved the ride all along. If you really asked me, I would say, I think at the FCC, starting there, I'm proud personally of the fact that I was in the seat when the internet arrived in full force. Nobody knew what to do with it. And all of a sudden, people were showing up at the FCC called Vonage and Free World Dialup. Bill Gates came to my office. It was a Wild West. And there was a lot of initial instinct that it's just telephone service, we just regulate it with telecommunications policy and law, and I spent a lot of time with the technologists trying to understand what the internet was and the way it worked, and I became incredibly convinced that this thing needed its own regulatory space. I still consider that seminal work by me and my team and my colleagues.

I think we stepped in and solved the HDTV problem. I mean, it was a mess, the transition wasn't happening. Cable wasn't involved, and we pulled the cable guys in and pulled the broadcasters in, and we got Congress to pay for the subsidy of boxes, which was amazing, and so that's something I think we did that I was really proud of.

When I was at the FCC, Wi-Fi was junk spectrum for baby monitors. I think we recognized that it had more potential than that. And I think we had a few savvy tech companies that came and said, "Look, this stuff is not junk, we could use it." And we did a lot of repurposing to allow Wi-Fi to become a broadband thing.

I have fought net neutrality for 25 years of my career, and the fact that I get to leave, and it's mostly dead, makes me super happy. I think that policy is an absolute mistake. I think the Democratic commissions that wanted to do it were way off base. It really was being politically driven, not policy driven, and it was politics that got out of control. Nobody was going to do any of the things that they feared. That was a bunch of made-up stuff by politicians and policymakers, and they didn't take the time to even try to understand: Is Comcast economically incented to do what you claim that they want to do? And they're not. If Comcast tried to block traffic, they'd get their head handed to them. And the country wasted shocking amounts of time, money, regulatory resources on something, [and] it's dead now, and nobody's even worried about it. That was my first very super-frustrating issue where I thought, "Nobody's really doing policy here."