Posted on 07/17/2005 7:31:37 AM PDT by RLM
There is one often overlooked item on the 109th Congressional agenda that is critical to our economy and our American system of free enterprise. I am talking about updating our nation’s telecom laws to unleash billions of dollars in new investment and economic growth, to renew America’s global competitiveness and to put consumers, rather than the government, in charge of our innovation economy.
When Congress last revisited the nation’s telecom laws in 1996, the Internet was in its infancy, cell phones were rare, few people had personal computers outside of work and cable companies provided solely television service while phone companies gave you only your dial tone. Today, technology has brought an explosion in consumer choices, value and innovation. Cable, wireline, wireless and satellite companies all are competing directly to meet your communications needs—from Internet, to digital television to voice. Congress has done a good job keeping regulatory and tax burdens low on emerging technologies, like Internet telephone service, making new advances more rapidly available to more Americans.
Unfortunately, this hands-off approach has not been extended to all competitors in today’s communications marketplace. The 1996 Telecom Act was written for a world in which only cable providers could compete with other cable providers, and only phone companies could compete with one another. Technology has obliterated those distinctions—to the benefit of consumers who now can make choices across a variety of communications technologies. Yet the laws on the books have not caught up with this technology-driven reality, tilting investment and the market advantage toward newer technologies not mired in outdated rules.
Some have proposed increasing the regulations on every competitor to level the playing field. I could not disagree more. In a competitive marketplace, consumer choices should guide the evolution of technology, not a "government knows best" approach. Similarly, where a compelling justification exists for limited regulation, such as to ensure affordable basic access to a dial tone or to uphold law enforcement and public safety needs, then the burden should be borne by all competitors, rather than a select few. Otherwise the government continues to distort the marketplace, and companies that uphold public objectives are essentially penalized for doing so.
Updating our almost decade-old telecom laws also could unlock billions of dollars in investment, infusing our economy with new jobs and GDP growth and helping the United States boost its global competitiveness. According to a study commissioned by the U.S. Chamber of Commerce, unleashing market-based competition in today’s communications sector could bring 212,000 new jobs and $634 billion in GDP growth over the next five years alone.
Currently, the United States ranks 13th in the world in broadband deployment, down from 11th in just one year. How is it that the country that invented the Internet is falling so rapidly behind? I believe the answer is not lack of American ingenuity, but heavy-handed, outdated government policy.
So, while I tend to agree with the Congressman, I’m troubled by terms such as “affordable local access, public safety needs, and uphold of law enforcement”. Instead of building these social subsidies in the rate structure of individual companies, they must not be continued as such, but the cost must be borne as a separately identifiable tax for specific services, something like the 9-1-1 surcharge in California. Consequently, dial tone, or any other service, would cost the same, regardless of use, such as personal or business, discounts based on volume only. When I buy gasoline, the dealer doesn’t ask me if it’s for business or personal use, nor does he provide “affordable” fuel at a discounted price to assure “universal” fuel availability to low income buyers.
So, if I could fully understand what the Congressman intends, I might agree. Unfortunately he mixes social issues in his objectives that should be totally separated from the rate structure.
Telcom, Cable laws need updating and the FCC needs to either reform or just go away....
When th FCC started to get more attorneys than engineers, things went downhill.
yep...pretty much...
like it is ludicrous that I should be stuck with the Dayton local channels and can't get the Columbus local channels on DirecTV.
Dayton sucks :)
As well you should be. Those are weasel words for "let's give the ILECs a priviledged place."
Make the ILECs sell off their networks and make everyone a CLEC, and encourage overbuilding. THEN take of the regulations.
I am so sick of the bloated bureaucracy of
Bell South, I'd be for another round of antitrust against the so-called Baby Bells.
That approach is called "structural separation." It would not reduce the incentive of modernizing the network because the network operator would have to fend off overbuilders and keep their CLECs happy.
All the countries ahead of us have massive government subsidies (and in some cases have nationalized) telecom services.
We as a country need to decide whether or not we want everyone to have broadband, or we want broadband services to only be delivered where profitable.
Not a bit. The same shareholders would own the same assets, split into two entities, or they would be free to choose ownership of one or the other entity.
Part of the former ILEC would be a CLEC. So saying this is "for the benefit of the CLECs" means it is also for the benefit of that part of the former ILEC.
And if hidden subsidies become more difficult to hide - what is wrong with that? Want an end to what you call the "crack of below cost networks?" Structural separation is, of course, the ultimate answer.
Do you or your firm hold any investments in CLECs?
No, but it is pretty clear you are bought-in to the ILEC weltanschauung.
In my view there is blame to go around: The CLECs have been incompetent opportunists, and the ILECs have been greedy and corrupt - for example, looking the other way as their unioninzed employees sabotage non-union ILECs' gear. But the ILECs are the biggest problem and biggest bribers of politicians.
Separate the ILECs from the network. They are the clot, the problem. Not a lack of subsidies. What ever benefitted from subsidies? Computer memory? Remember THOSE subsidies? Fat lot of good that did.
When CLECs stop basing their business plans on the subsidy provided by below-cost forced leasing of the ILEC network, I'll take them seriously. Non-facilities-based competition is a feel-good mirage Reed Hundt concocted for Al Gore's benefit.
"Separate the ILECs from the network"-- and how exactly will that foster overbuild and thus facilities-based competition? It'll just institutionalize the current Potemkin-village reseller "competition."
If you want the benefits of real competition, you can't just change the name on the phone bill and the address to where the check is sent. But that's exactly what you advocate when you call for structural separation. Under that scenario, everyone would still be using the same network. Your CLEC friends would reap a little more unearned reward from the ILECs' past investment, but from the consumer perspective nothing would change.
So it appears that your complaint isn't the lack of innovation that would result from overbuild and facilities-based competition--you're just annoyed that the CLECs don't get bigger margins when they slap their name on the phone bill and collect payments from customers for providing the same service over the same wires without adding any value whatsoever.
"What ever benefited from subsidies"?
Nothing. And that's why CLECs shouldn't be subsidized by ILECs through below-cost UNE rates. In fact, that's why they should invest in their own facilities. We'd all benefit.
Yes, there are some CLECs that richly deserved their melt-down. But the rise of MVNOs shows that non-facilities-based competitors are valid. In wireless or wireline service, an xVNO can add plenty of value, if only in providing less abysmal customer service, and less greedy and abusive terms of service.
So if a level playing field is so good, you should like structual separation. Remember, it is the shareholders that own the network, not unions or the self-perpetuating management at ILECs.
bttt
Won't happen until all competitors are paying the real price of the underlying network, and not hiding behind regulatory and union incumbency enhancements. That is the idea behind structural separation.
Until structural separataion happens, ILECs get to define "cost" in the most anticompetitive way possible.
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