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Outside View: Template for telecom reform
by Robert Yadon | Barry Umansky
Muncie, Ind. (UPI) Feb 22, 2013


disclaimer: image is for illustration purposes only

Indiana remains the poster child of efficient regulation of telecommunications in America; the envy of most other states.

Since 2006, Indiana has systematically streamlined archaic regulations and thereby encouraged outside capital investment in the telecommunications infrastructure, improved competition and protected consumer interests.

It's this "light" regulatory touch the federal government should pay attention to.

This month marks the 17th anniversary of the Telecom Act. As with all anniversaries, it provides an opportunity to pause and take stock of where we are, where we have been and where we can go from here.

Now for the good news:

The Telecommunications Act of 1996 was a far-reaching, successful and innovative piece of bipartisan legislation voted into law to ensure that technology would move forward without roadblocks.

Moreover, rather than just writing a law for the current state of competition and the current technologies, Congress had the foresight to anticipate a time when the very regulations they were signing into law may no longer apply.

Congress understood that technologies and markets change over time. It therefore explicitly directed the Federal Communications Commission to forbear from applying any legal provision "to a telecommunications carrier ... in any or some of its ... geographic markets," if it finds the forbearance criteria have been met.

Essentially, the FCC is empowered to find that enforcement of select, legacy regulations may no longer be necessary to protect consumers, that forbearance "is consistent with the public interest," and that forbearance will enhance competition.

Each of those three criteria is easily met in 2013.

Technology has evolved dramatically since 1996, and consumers have voted with their feet, often choosing to give up the wireline telephone services of the past in favor of wireless and broadband services.

AT&T, for example, says that since 1999, the number of residential fixed landlines has fallen 68 percent in its 22-state footprint, including Indiana, where it provides local telephone service, even as the number of households it serves has increased. Today, approximately 25 percent of residential customers in those states still subscribe to landline "plain old telephone service."

The FCC should use this opportunity to acknowledge the telecom landscape and consumer habits have changed and, like Indiana, adapt its regulations accordingly.

In the transition away from old and outdated networks, a broadband, Internet Protocol-based world has the potential to enhance competition across multiple services (voice, data and video delivery).

At this moment, a petition is currently pending at the FCC, which if approved, would allow a limited set of beta tests for the deployment of IP-based networks. Using the flexibility that Congress wisely preserved seventeen years ago, the FCC should authorize these tests to demonstrate the potential benefits of the transition to all-IP for consumers and enhanced competition.

Back in 2002, six years after the Telecom Act was passed, FCC Chairman Michael Powell wrote that "broadband deployment is the central communications policy objective in America. Many commenters have been calling, in particular, for the commission to provide regulatory certainty and clarity in the provision of broadband Internet access services by limiting unnecessary or unduly burdensome regulatory costs on service providers. It is now time for fewer words and more action."

Powell continued to state that "our greatest challenge in promoting broadband investment is deciding how best to stimulate enormous private sector investment."

His words ring as true today as they did more than a decade ago. It is indeed time for fewer words and more action. Particularly when the path to attracting private sector investment is so evident, we cannot afford to wait.

The FCC should continue to take every step possible to ensure that the IP transition moves as fast as possible. That's the best birthday present the farsighted authors of the Telecom Act could wish for.

(Robert Yadon, Ph.D. and Barry Umansky, J.D., are senior research fellows in the Digital Policy Institute at Ball State University.)

(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)

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