For more than a century, the State of Wisconsin had a straightforward mission when it came to regulating what we now call "telecommunications." That's because telecommunications itself was a straightforward technology: It was two-way, voice-grade, analog-wired service.
In short, telecom was a plain black telephone.
Today, telecommunications is defined broadly to reflect a tidal wave of change in the age of digital computing and the Internet. The early 21st century meaning of telecommunications is the transmission and distribution of multiple forms of data - voice, text, video, music and more - through a variety of means.
But don't print that definition in indelible ink. Technology could change it tomorrow.
Seemingly overnight, the revolution in telecommunications has shattered rules that generations believed to be unwavering. It is why Wisconsin should overhaul how it regulates telecom providers.
Wisconsin's ability to compete fully in the global economy increasingly rests on the ability of the state - from its major cities to its small communities - to gain access to the latest telecom tools. That is unlikely to happen, however, in a regulated environment that ignores consumer adoption of new technologies that defy regulation in the traditional sense.
The state should push to deregulate its telecom markets. It should rethink the notion of "universal service" in the 21st century, when 85% of all Americans already own a cell phone. And it should embrace the fact that convergence of communications technologies is creating new opportunities for Wisconsin citizens and their communities. Regulation today, as presently constituted, doesn't reflect the reality of consumer choices.
Wisconsin's telecom laws were last changed in 1994, well before the digital revolution hit full stride. Today, so-called "incumbent" telephone companies of all sizes are heavily regulated when it comes to landline service, while myriad new players in wireless, broadband, Voice over Internet Protocol largely are unregulated at the state level. The answer is not to regulate those new technologies, which have grown steadily in popularity while dropping in price, but to unshackle companies that are still hamstrung by "rotary dial" regulation.
Ohio, Indiana, Michigan, Iowa and Illinois have all updated their telecom laws in recent years, with the result being more investment by telecom companies and more jobs. A recent study by the Discovery Institute, commissioned by Wired Wisconsin and the Wisconsin Technology Council, concluded more than 50,000 jobs could be created statewide if telecom regulations are recast. That's a solid head start on Governor-elect Scott Walker's goal of creating 250,000 jobs in four years.
In addition to near-ubiquitous cell phone coverage, other trends illustrate why clinging to inefficient landline regulation no longer makes sense:
• VoIP services were offered by 10 or more providers, often cable companies, in ZIP codes containing 86.2% of the nation's households in 2009, according to the Federal Communications Commission. Only one-half of 1% of households remain out of reach of VoIP service if they want it.
• More than a quarter of the nation's households live in households with only wireless telephones, according to federal data. Another 15% receive most of their calls on wireless telephones even if they own a landline phone.
• More than 99% of the U.S. population lives in areas where one or more operators offer wireless service. Even in rural census blocks, mobile penetration is 98%.
• The Economist recently predicted that if consumers discontinue landline telephone service at the current rate, "the last cord will be cut sometime in 2025."
In short, the explosion in telecom choices has redefined what regulators call "basic service adequacy." With the exception of the demise of the public telephone booth, service adequacy has grown as more choices have become available. Prices for devices have tumbled, service plans have become more affordable, and complaints about service have diminished as competitors have hustled to make their customers happy.
Consumer protection is not enhanced by devoting a disproportionate share of resources to pre-emptive regulations predicated on the notion that all providers are out to hurt their own customers. True consumer protection involves acting quickly and decisively when there are cases of fraud, examples of unwarranted service interruptions, failure to perform and other actual instances in which consumers are harmed.
Rather than spend time and money on policing what regulators think providers might do wrong, let's aggressively pursue actual instances of consumer harm. Over time, the market will protect consumers - as the competitive wireless market has demonstrated.
Wisconsin is still a state of small towns and rural communities. Some of these areas lack the critical mass of people, institutions and capital to easily attract high-tech businesses. But they have other assets to offer families, workers and businesses - if only they could fully participate in the global communications revolution.
Telecom deregulation will help ensure that Wisconsin's "digital divide" closes and that more opportunities open up to the state's small businesses and workers. If Walker and the new Legislature want Wisconsin to be "open for business," a good place to start is by opening the state's telecom markets.
Tom Still is president of the Wisconsin Technology Council and the Wisconsin Innovation Network. He can be reached by e-mail at email@example.com.