Rules in Flux

Article excerpt


Change is nothing new in the high-tech world. After all, cutting-edge technologies are transforming by nature, finding new ways to solve old problems. Nowhere is this more prevalent than in today's telecommunications market, where the Federal Communications Commission chairman has announced his resignation, states are rewriting their telecommunications rules, and digitized Internet protocols are swiftly making old analog technologies obsolete.

In short, the technology, the players and the rules of the game are all in flux. This provides the perfect opportunity to overhaul today's regulations, which are based on yesterday's technologies and no longer serve consumers or competitors.

Outgoing FCC Chairman Michael Powell was acutely aware of the changes afoot. His tenure was marked by a vision to promote a more competitive marketplace through new rules that acknowledge innovations since the 1996 Telecommunications Act was signed into law.

As telephone, cable, wireless and satellite technologies converged, the old rules intended to open the market began to stifle competition and limit critical investments. Different taxes and regulations for these different providers make little sense when they all compete to provide consumers the latest bundle of voice, video and data services. Unfortunately, political hurdles and bureaucratic inertia have left Mr. Powell's vision unfulfilled, leaving those in the marketplace to fight it out in the courts rather than compete for customers.

Ideally, the incoming chairman will continue carrying the mantle of reform, ushering in a new marketplace where all providers can compete head-to-head in an open market.

State regulations have also begun to chafe, and a number of states are rewriting their telecommunications laws. Here, too, competition and removing barriers to innovation should be emphasized. Though wireless subscribers now outnumber landlines in a number of states, the laws ignore this important source of competition, as well the threat from phone service provided by cable companies using VOIP technologies. Instead, the laws have artificially segmented the market, with different rules, taxes and requirements for phone companies, cable companies, wireless companies and others.

The current round of rewrites should modernize failing laws and establish a true competitive marketplace that allows all providers to compete equally for customers.

The marketplace itself is probably the best arbiter of change, with new technologies driving significant industry realignments. …