Competition and the Telecom Marketplace

Competition and the Telecom Marketplace

Cox Letter to the Editor in The Wall Street Journal
August 17, 2005

Holman Jenkins addresses one of the many sticking points for broadband deployment -- cities and localities. Indeed, in today's communications landscape dominated by large, national companies, localities are able to exert disproportionate influence over what should be national policy. Going forward, if the U.S. is to have a national broadband goal, we must resolve the following: When is a state or local action in violation of the interstate commerce clause?

Our country's federalist arrangement serves us well as a nation when states compete against each other. Income taxes and corporate law are examples of areas where states effectively compete. This arrangement breaks down with network industries. State telecommunications regulation -- based on franchising, price and entry controls -- has not been effective at creating a national market.

The commerce clause of the Constitution exists to prevent localities from violating the rights of national enterprises. An internet-based communications network is truly a national industry. It's not a stretch for Washington to get involved here. And when it does, all consumers will be better off.