president and ceo of the national tella communications association. thank you for being on the communicators. what would you say is the biggest policy issue that facesncta during 2011? >> id is not that easy to answer. increasingly a lot of issues we focus on are a consequence of convergence and what is coming out of the web. if you add up the issues we have been focused about, a lot of them are the intersection with web issues. pick privacy. an important issue that has been driven by the headlines associated with facebook or google but they have implications for the infrastructure providers as well. cyber security is an important issue to us and growing more significant by the day. that also grows out of our anxiety about an increasing digital economy. the days that traditional

section 625 of the telecommunication acted dispute. part of the things that is a good thing. we are dealing with issues associate with the ambiguity of the intersection of the web and traditional architecture. >> there are a couple of privacy bills working their way through congress. are you supporting any of them are opposed to any of them? >> we have been very engaged. those things have a way to go. we have a couple of principles that are really important to us. over time there are not willing to be as many distinctions between what we do as an industry and what you call the web doing for an industry. take for instance the use of metadata, these are things cable industries will want to do as well. we are focused on making sure we are not left out of that equation, would ever balance is struck.

at the same time, we live with regis -- legacy regulations that have the same impulse that a different moment in time. we live by regulatory telecom act rules of privacy that were written well over more than one decade ago. we are very concerned about living under multiple different regulatory regimes that do not -- they are not congruent. we are making sure that we can try to harmonize that across the board. >> let's bring kim hart from politico into our conversation. >> thank you. you mentioned cyber security. where to you -- what do you think about the direction that cyber security is going and how the private sector should be and baden that discussion? "i think that the big global it is all healthy. it is all-important.

this is listed off the pieces -- we are willing to be engaged in any at all of it. we recently were very strong supporters of the mike rogers bill which was one of the first to get moving. we launched did at ncta with him and his team. we think that is critical because the biggest thing -- my view is what you do not know can hurt you. we have the government who has access to all kinds of approbation about cyber threat and the roles of other national government that are not shared with were fully appreciated by industries like our own. his bill were you are able to bring together an ability to share and a permission, as long as you protect the privacy of consumers, we think that is a constructive approach. there are other bills that approach is working their way through. i do not think we have taken a

strong view that any of them is inherently wrong other than we think more is not known then known and it has to be legislation that can breed and the golf and it does not get heavily prescriptive from a regulatory standpoint and a way where you are trying to rewrite it every time you learn something new. it can become two straight jacket if you do things a specific way. >> in talking about the cable industry still being under regulatory regime and a legislative regime that is more than 15 years old, do you think the telecom act needs to be written in order to better reflect the new age we are index >> i do, but i am not want to say let's start writing the entire 750,000 words of it tomorrow. i do think it is fading in its relevance. i wonder if i took every speech of the current chairman and see

how many times he has mentioned the words broadband and internet over media ownership or cable program access rules or telecom interconnection policies, the core of the 1996 act. i think we but find a huge disconnect between the focus of the administration and what is in the statute. you heard this before. we are still regulating it very balkanized bucket to. it is either going to die under its own weight, and is certainly

growing and relevancy i would argue. at one. congress has to migrate us out of it. migrate to a regulatory world as opposed to shatter it and try to write the same thing in a another four year dramatic exercise. you could have a substantially shorter broadband the bill that is a standards based and more flexible that rewards companies for investing in migrating to it. >> peter stern of time warner's strategy team has recently said that time warner is essentially a broadband provider. television shows that it as a cable company provides are a convenient at this point. dq acre with that? >> is embedded in a statement like that are multiple levels. from a technology and architecture standpoint, is certainly true. a pipe is a pipe now. data is data.

we have this statute that treats of the services like a completely different regulatory category. when an engineer sits down to build an ip data network today, none of that comes into consideration. number one, which spent 100 years regulating networks based on their technological characteristics. most of broadcasting is premised on the idea you have to distribute the signal to the community of licenses because it is the only way to get it across the country. to data is not true at all. from a business standpoint if you are a cable operator, increasingly this is the growth part of your business. is the higher margin of your business. the part of your business to consumers increasingly demand it cannot do without. it is the 21st century architecture. you can increasingly see that if all applications are just data

on my network, fundamentally you can at -- imagine a world of matter what service you are providing, you provided in the same way you provide web pages or some version of that. it sounds dramatic to say tv is an app. it is a compelling service that people like heard it will more often the way consumers interact with it. it will more often a way they will be able to later things onto it. it will be a compelling offering. i think it will still be in the business for a long time. >> how does spectrum after the question? that is what the sec has been in their efforts to make sure that option and expansion happen in a timely manner. how does the cable industry see them playing into their own business model going forward? especially with a new deal with it for rise in. >> let's not call it spectrum, but the real isue is you have

capabiities youw ant to provide for part of the consumer experience. we are quick to say -- you are saying you need to have mobility to the services youare providing today. you want to make sure you are no thethered to a timeplace and location. wireless has become the home networking standard. my house is littered with things that talk to my wife i network and broadband connections to bring things to live without having to run wires to the wall and tear up the house. i have my tivo dam it -- download the data using a wife by -- wifi connectionl

you have to use wireless to pollute their stuff together. i think that is an important function that wireless service. i think any information has to be working on a wireless or mobile strategy. i think the third thing you really have to import is how do you take advantage of steve job's -- god rest his soul -- genius? the cable industry will not build a tablet. when the tablet comes out, how do you make sure you get to be part of that connection that a consumer enjoys on that product? to do that you beat -- better be able to contribute to the service. if you cannot come over that platform and device, you are cutting yourself out of that innovation curve. i think increasingly with the cable industry is coming to the

conclusion and with the deal represents is, we have a strong interest in wireless but we are probably not well positioned to be a terrestrial cellular tower based wireless company. that is a really hard business. the biggest mistake i have some companies make is thinking entirely new businesses is just wireless. going into local will just be an extension. wireless is a different business. it takes a lot of capital, a lot of expertise, an employee base that is capable. i think those are relatively was and respective forces. no one should read that as they are done with wireless. it cannot afford to be done with wireless. it will start to focus more on why five -- wifi.

>> what is the partner in a situation that is part of that deal, will it this incentivize the wireless and cable companies to compete against each other if they are partnering up? >> i think that is a cooking to be talking about. i think there is more we do not know that we do know. there are very few people who have seen the depths where details of what they have agreed to. i have not seen them and i do not know the full extent of what they mean. everybody is reporting off a small bits of what was supposedly know. telecom companies are cross selling directv. i have not seen anyone who has been enormously powerful destructive forces and changing the competitive dynamics. i would point to use if someone says --verizon is not want to compete with comcast anymore

with fios. the next 80 study is zerizon will launch a netflix like screaming service to compete out of the market they thought they might be cross marketing. the only thing i know that is sure is it never stops surprising me. i think it is a gyrating metamorphic rising space that every time i turn it around it is twisting in a new direction. i do not think it goes away. i think the products are so compelling, the experience to the consumers are so compelling it is a tough market to say i am completely ignorant of. it will tear it of the deal on their wireless platform, on their broad panned and service provider, and americans are still watching and hundred 46 hours of television -- it is still an enormous the consent service. we will see. i do not know the answer.

>> specifically to follow up on the question, how does the fact that time warner, comcast are now selling spectrum or planning on selling spectrum to verizon -- how does best -- how does that change the telecom landscape? >> it will continue to be an issue for the country, what do people think is the acceptable market structure of the wireless market? right now you have at&t and t mobil and regulatory review channels. you have concerns about the growing concentration. i am not subscribing any one of these views. i think it is much more nuanced picture that is generally credited. verizon is the number one wireless provider and it just got a whole lot more spectrum. if you look at the sec is a screen for anti-competitive

concerns, i have read that only three of the 100 markets there are and what even trip the screen. is it too much or too little? there will be a lot of anxiety about the gyrations going on in the wireless market because of spectrum constraint, two of the companies are struggling, 4g ha to be deployed. there is an excitement that this is an area where america is leading and could do very well and want to continue. i think some of that is the iphone. we have seen the power of the platform. there will be some discussions about what is the migratory path of traditional wire broadband. these are both companies also and that space. >> to you think that wired and wireless companies and platforms should be regulated the same? are they still fundamentally different? >> there is no simple answer to that. i wish there was. it depends on what we are

talking about. miti is when you regulate, you should try your best -- i do not always sit the same. the should be harmonized. an underlying concern our principal, you should be trying to ensure that it is harmonized across architectures because they are increasingly turning to becoming more similar than different. you run the risk up inadvertently providing a competitive advantage or disadvantage to one guy burdening one over the other. i would say harmonization rather than being identical. they do have different characteristics that are really bottom line impacting. a wireless company has to have a critical resource only provided by the government. the cable industry was built with private capital and goes out and built and constructs. verizon or a wireless company has to come to the government and get its most critical aspect.

it leases it to you under licence terms. those are different regulatory conversations and what we had on the terrestrial side. there are also other problems by nature of that technology. i do not know how many -- j.d. power and consumer reports are out this week. consumers have a different tolerance of dropped calls, network congestion is a different issue. i would think an enlightened regulator would be attuned to differences and not act like with one sledgehammer the can be treated the same. there are also conscious to make sure the are harmonizing and not creating an irreconcilable conflict. ersthis is "the communicat ." served as chairman from 2001 to 2005. kim hart is our guest reporter.

>> the fcc's but most of the fall dealing with consumer reform. it put a lot of input into the proceeding. one of the biggest concerns that the cable industry had was the right of first refusal provisions. he thought they gave an unfair edge package to all providers rather than cable providers and being able to receive a subsidy to build up their broadband network. talk about how you see that affecting cables interest in andy's rule areas where it is hard to reach. is this something you see cable companies suing the ftc over? >> cable is very proud to say that we have been through three or four cycles of the government new-found infatuation with competition over a natural monopoly.

if you think about it, for 100 years in the united states we had a belief that all of these industries were natural monopolies. the government actually sanctioned them. these were not monopolies created in the marketplace. at&t did not become the phone company because they beat everybody. it did because the government made a deal. the deal it made in the early 1900's was something called universal service. in exchange for you being allowed to be the sole provider without fear of an antitrust response, you agree to serve the country with ubiquitous and affordable service. the term universal service was first coined by theodore avail. it was part of it gesture to get rid of for this concept of ubiquity and affordability. i think the yen -- the universe has been built naturally as it was from the beginning as a system that presumes the

presence of a market monopoly and one who the social objectives of the program are achieved by allowing the monopolist to subsidize service and chart -- charge more for long service. what is the monopolist care? i am sloshing money from one pocket to the next budget. but kantor said, we have changed our mind. we do not believe the natural monopolies. we want to see competition. you have companies going into competing markets. but consider ourselves a competitive industry. the compete against the company that has all kind of guaranteed government subsidization through this program. you have a guaranteed profit guaranteed by the dead states and the state government. we have to create a profit. we have to borrow capital in the private markets.

these are just forces you cannot compete with. as the industry committed to the principle, we wanted to see more of that a that unaided. we agree with the government subsidizing the hardest served areas. if everybody wants to compete once to show up and try, why should the government once again sanction a privilege for incumbency. the only argument that really what out to the extent that it went out was because there were already -- but forbid they should have to lose some money. it is a political problem and not a policy problem. we were happy with that. right of first refusal, why should the government give any one that right? that is not for the consumer. if you want to treat the consumer well, let us compete and let the consumer to it.

is it important to us? we have companies that serve communities of that 50 people. they are fighting against some tell colorado that has all of the advantage. they care a lot. i do not know if we would sue. as an association we have not reached that in any shape or form. we are generally happen the -- happy with the u.s. efforts. i think it is one thing to command the commission for is tough, for myself and the other chairman have broken trying to do it. i think it is smart to move it away from the service approach we have used. >> talk a little bit about the real transitioning consent to debate that has been brewing for some time and what that means for your industry especially since the landscape has changed so much and what companies on each other. i know you have companies on both sides of the debate. how you handle that? >> part of it is a data set with

from what we were talking about a minute ago. we have a legacy environment or the government had an intimate relationship with particular industries because of social objectives that wanted to achieve. the premise that the country made it 8 social compact with the commercial broadcasting industry that it would provide free over the air video services serving the public interest needs of the local community and exchange for this they would get free spectrum and other government benefits as a consequence of the social compact. i have always been cenacle of the social compact. i think it proves more theoretical than real. i think a lot of horse trading goes on to whether there are real burdens associated with that or not. the reality is you have major entertainment companies that

have come out and have added cable programming and studios. now they are very substantial well-founded effective media companies to provide phenomenally good programming and want to come into the market. they want to negotiate for fees based on their value just as other cable programmers do. a little bit of a disconnect is that they enjoy a certain kinds of elements in their negotiations by virtue of this broadcast social premise which is arguably not really there were fair. there is history here. the history has led -- allowed some of the companies to build into the airport and companies that are today. with that said, i think it is a little overblown. when we say that, we say what are the specific rules? what do they radically or

dramatically change the nature of that relationship. a little bit, but probably would not get at the heart of what the growing challenge in the industry. you have seen articles about sports programming. something like that goes far beyond the media industry that is espn or the operator. i do not know why the texas longhorns get their own network and get paid -- sports money is frequently high. is there a limit? reports that the nfl wants a 60% increase in media rates. where is the new hampshire as protection? most of the industries are exempted from the kinds of constraints that would normally not be permitted. i think the nfl is one of the finest from businesses in america. but they negotiate on behalf of the entire league. is one package. you cannot play one of the other. there are good reasons why they do that. is one of the smartest business

models out there. that leads to an ever escalating problem with these that have to be funneled through the system. the challenges that is observed by saying he is being has to cover its costs from an operator who was to turn it around and cover its costs for a consumer. a huge chunks are not sure there would want that, but they will have to be part of the subsidization. that is open up to the point. i think the anxiety in people's hearts and minds is maybe not today, maybe not tomorrow, maybe not next year, but, gosh, this and let it trajectory that at some point we cannot preserve. what happens when we can't? a lot of people are having important conversations because of these anxieties as opposed to the blade is used to be debated in the past with regulatory issues. i think it is a big business

question. many of them have very healthy conversations about how to be coped with this program and how we might rid ourselves to a better place. if you see companies like time warner experimenting with smaller packages, you have seen companies work out things like hbo go, can we extend the experience? i think there is a healthier route of this than in the past for the government initiated an attack on cable pricing or all cart -- more of the kind of rich tradition. >> time for one more question. >> it says you have been in the chairman's position. republicans are really working hard to try to implement some reform of how the agency's work. judging from your experience, you think that process needs to be reformed? >> i think there are elements

that do. some of it is -- the big stuff would be harder than it sounds. on the one side i have always been critical including during my own tenure, they do not really have a roller procedure but trading of record and america has a rule of procedures book. i think there are other agencies that have a clear set of rules about how things are done. when you vote an item. how long an item once it is voted is considered finished. one can commissioners bring an item from the bureau up on -- there are millions of questions about policy and process at the fcc that has no kind of rule book answer. the industry does not have a lot of transparency. the chairman has a lot of power to use and manipulate the process. city commissioners who do not like stuff. i tried to get my colleagues to

erode a rule of procedure and it would not because some have an advantage by not following those rules. if i were congress, i would be tempted to say, i am not going to be prescriptive about everything you are doing. it is good government you should have a roll up procedures and it should follow the following topics. the community ought to know what rules that are playing by. even public interest groups have to argue whether the rules are being fully followed. this is just on necessary that can be clarified in a clean way. it is a new deal era agency. a lot of promises in the way it was constructed. i am not one of those people who think we do not need it. i do think at some point, five commissioners, in the internet aid that may become increasingly too cumbersome. how do you rebuild the structure how do you rebuild the structure and a constructive way