Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
Full document available in pdf format<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
There’s good news and bad news in the wonky world of telecom reform. The good news is that everyone involved—members of Congress, the Federal Communications Commission and state regulators—realize reform is inevitable. The current communications law is woefully ill-suited for the ever-changing communications market and ongoing Internet revolution. The bad news is the wheels of legislative reform grind slowly—and in this case, unpredictably.
So what’s a would-be reformer to do?
The path toward reform begins with the admission of a problem. The basic quandary in telecommunications regulation lies in the legislature’s attempt to classify different types of communications services. Current telecom law uses two major categories to classify communications technologies: a “telecommunications service,” such as your local and long-distance phone service, is the most highly regulated category; an “information service,” currently defined as involving the transmission of data that requires manipulation (including the breaking up of data into packets), refers to such services as Internet access, e-mail and cable television and is lightly regulated.
These technology-based categories create distinctions that no longer make sense in our technologically converged world. Thanks to VoIP (Internet telephones), local phone service is no longer just an analog transmission over the telephone network. In addition, cable services can include two-way voice transmissions that resemble telecommunications services. Artificial regulatory distinctions have created market disparities that have hurt consumers and set an unbalanced playing field for communications companies.
Recognizing the need for reform leads to the inevitable question—how do we go about doing it? There are numerous proposals under debate among telecom policy wonks, and each one is a variant of two major reform scenarios—”big bang” or “slice and dice.” A “big bang” scenario involves the comprehensive overhaul of the Communications Act of 1934 (as well as the Telecommunications Act of 1996). The “slice and dice” approach examines discrete issues based on technology or service sector.