• allow the free sale and ownership of the broadcast spectrum; • repeal 47 U.S.C. sec. 254, which imposes a heavy regulatory tax on consumers and businesses to subsidize universal service; • minimize the application of “unbundling,” or “open access,” rules to new broadband and high-speed data networks; and • finally eliminate the Federal Communications Commission.
Decades of experience with telecommunications regulation teach a simple lesson: regulation stifles competition and growth. By contrast, the computer and software industry, largely unfettered by regulation, is one of the most vibrant, competitive, and innovative sectors of the economy. In 1996 Congress tentatively deregulated some aspects of the telecommunications industry. But the work of deregulation is not done.
The rapid pace of change in the telecommunications industry makes regulatory micromanagement harmful for two reasons. First, regulators cannot adapt regulations fast enough to keep up with changes in the industry. Cellular phones were delayed for 10 years by the FCC, at a cost to the economy estimated by National Economic Research Associates at $85 billion. Regulators' attempts to adjust to change create further uncertainty and delay.
Second, regulators are most friendly to familiar technologies and see new competition as an attack on regulatory goals. MCI had been using microwaves to send signals over long distances in competition with AT&T for decades, but competition was held back by the FCC. For years the FCC suppressed cable to protect television broadcasters.
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Book title: Cato Handbook for Congress:Policy Recommendations for the 106th Congress. Contributors: Edward H. Crane - Editor, David Boaz - Editor. Publisher: Cato Institute. Place of publication: Washington, DC. Publication year: 1999. Page number: 449.
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