Wheeler urges INTX to make broadband more competitive; cable titans call his remarks 'baffling'

CHICAGO--Addressing an INTX convention backed by a trade group that's suing to stop his new Open Internet orders, FCC Chairman Tom Wheeler urged cable operators to embrace their transformation from cable TV distributors to broadband companies and rise to the "challenge" of making Internet service a more competitive business.

"Often people say to me, 'I know you won't do anything crazy, but what about those who follow you?' remarked Wheeler, leading off the morning keynote Wednesday morning at INTX, and discussing the cable industry's reaction to the FCC's new Title II-based Internet regulation. 

"My response is,'take you at your word to protect an open Internet, but what about those that follow you?'" he added.

Crediting the cable industry for gestating the current "Golden Age of Television" by expanding competition for programming over the last 20 years, Wheeler urged the industry to once again reinvent itself.

"In the second quarter of 2014, and for the first time, the number of cable broadband subscribers exceeded cable TV subscribers," he said. "And the trend has continued.

You have wisely changed the name of the Cable Show to emphasize the Internet. But there's a more profound name change going on. You are no longer the 'cable' industry. You are the leading association of leading broadband providers."

And with that transformation, Wheeler suggested, cable operators have a responsibility to make the broadband more competitive. 

"Your challenge will be to overcome the temptation to use your predominant position in broadband to protect your traditional cable business. The Internet will disrupt your existing business model," he said. 

The Federal Communications Commission chairman received warm applause when he exited the stage. But the boisterous applause received by the panel of cable industry CEOs who followed Wheeler onstage, and expressed outright consternation towards his remarks, made it clear the rank and file INTX constituency wasn't moved by Wheeler's comments. 

"I'm baffled by the chairman's remarks," said Liberty Global president and CEO Mike Fries, who said that even the European regulators his company mostly deals with don't agree with the FCC's new rules for regulating the U.S. Internet. "It's the most blatant example of punishing success I've ever seen," Friese added. "I'm happy to be operating abroad, let's just put it that way."

Asked to expand on Fries' remarks, Charter Communications President and CEO Tom Rutledge said, "We suffer from Stockholm Syndrome here in the U.S. We have to be careful with our captures."

Finally, minutes after Wheeler left the stage Wednesday morning, the National Cable & Telecommunications Association, which produces INTX, released this statement: "We are grateful that Chairman Wheeler and Commissioners Clyburn, O'Rielly, Pai and Rosenworcel are all participating at INTX.  As strong supporters of an open and robust Internet that is delivering ever-increasing speeds and a great experience for American consumers, we appreciate that Chairman Wheeler would use the show to highlight the importance of net neutrality.  Cable is the largest broadband industry in America and our networks are ushering in an exciting transformation of how consumers are enjoying content and experiencing new entertainment services.  The INTX show is just a small example of how the cable industry is providing a platform of possibilities that is open for all kinds of transformative services and groundbreaking opportunities."

Show coverage: INTX Live 2015

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FCC's Wheeler declares cord cutting to be an official thing, puts hard sell on spectrum auction
NCTA, ACA sue the FCC over net neutrality rules
Senator Nelson: We can't put a straightjacket on the FCC

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