The intriguing new appointment of Michael Powell

Michael PowellAs the new head of the Cable Television trade association, history can judge Michael Powell only one of two ways. He will either be the biggest sell-out in the history of the digital age, or he will be the man who leads cable TV into the era of unbundled television. There’s no middle ground for Powell, because the stakes are too high and he knows too much.

Powell is a brilliant visionary who served well as FCC Chairman during the early Bush years (he was a Clinton appointee), defending the open Internet before it was popular. Widely regarded as a man who “gets it,” it was Powell’s words to students at Stanford University at the end of 2003 that opened so many eyes as to what was really taking place in the disruptive world of digital media. A strong advocate for the disruptive power of what he called “application separation,” Powell wove the concept into everything he did atop the FCC. For those who have forgotten, here are those remarkable words from December 2003:

“To be a phone company you don’t have to weave tightly the voice service into the infrastructure. You can ride it on top of the infrastructure. So if you’re a Vonage, you own no infrastructure, you own no trucks, you roll to no one’s house. They turn voice into an application and shoot it across one of these platforms and suddenly you’re in business. And that’s why if you’re the music industry you’re scared. And if you’re the television studio, movie industry, you’re scared. And if you’re an incumbent infrastructure carrier, you’d better be scared because this application separation is the most important paradigm shift in the history of communications and will change things forever. I have no problem if a big and venerable company no longer exists tomorrow, as long as that value is transferred somewhere else in the economy.”

“We don’t want one pipe,” he added. “We’re doing everything we can to incent the free-radical opportunities for multiple routes to the home. So when you look at FCC proceedings, that’s where there’s so much energy going into WiFi, and ultra-wideband and powerline broadband and laser optics and free-space optics and other policies that encourage and incent the creation of alternate digital platforms.”

But it is this vision — “The most powerful paradigm shift is the fact that applications are not woven into the platforms” — that he now finds himself confronting as the leader of the cable industry’s highest lobbying organization. Cable wants only one pipe. Cable resists application separation. Cable is a venerable institution. Cable is THE incumbent infrastructure carrier. Cable is everything painted in the above picture as completely hosed by technology, and yet here we have Michael Powell working on its behalf. Go back and read that again, and ask yourself how a man like Powell will defend the status quo against this “most important paradigm shift in the history of communications.”

I don’t see how it can happen.

Political observers are already noting that Powell, a Republican, is a natural fit to lobby on behalf of the cable industry, but I think this move is provocative and could be seen as unsettling for entrenched industry insiders.

Television faces unbundling just as surely as the music industry did at the end of the 20th Century. People reject the bundles on every level, and technology is there to assist them dismantle what they’re being force-fed. Google TV — and other applications like it — offers searchable content, which I still believe is the way entertainment will be consumed tomorrow. Unbundled Netflix is another powerful competitor of the cable industry (see this new TechCrunch article). Will Powell go after them? How will Powell —; knowing what’s really taking place — stop the impossible? Or will he lead an important effort for the industry to cannibalize itself, rather than be taken apart from outside?

My sense is that Michael Powell is too smart to take this job to be a caretaker for a dying industry, and that’s why I like the appointment so much. Powell is THE right guy to helm an industry in transition, and I’m giving him the benefit of the doubt, at least for now. If, however, he chooses to defend the old paradigm in the midst of disruption, the only fitting word for history to describe him will be FAIL. That would be a crying shame.

Comments

  1. Very interesting thoughts, Terry.

    Netflix is the single most powerful argument for me KEEPING my cable-with-Internet bundled service.

    I need reliable, unlimited, unmolested, neutral bandwidth. If all I needed was speed on the Web, I’d be better off with T‑Mobile wireless — which is (surprisingly) faster … for the first five gigabytes.

    If you want my business as a pipeline provider you have to understand this application-separation issue and learn to love it.

    Let’s hope that Powell is more than a lobbyist — that he can talk some sense into the cable operators.

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