^{Democracy & Technology Blog} House telecom proposal a wake up call

The reaction to the draft broadband proposal in the House reminds me of the horror and/or ridicule that greeted each one of the many drafts of what became the Telecommunications Act of 1996. A proposal that is designed to hopefully have a chance of being enacted is always a disappointment (see House telecom proposal opens new frontiers for regulation). Its also not a bad indication where the process would ultimately lead if nothing is done to educate the public about the benefits of deregulation.

The problem is a lack of faith in free markets and a skepticism that deregulation works. Even supporters of deregulation fret over whether there is a right way and a wrong way to do it — this is the worst thing of all because it leads to partial deregulation which is always a failure.

Despite the enormous benefits of airline deregulation, many Senators and Congressmen still fixate on the fact that smaller airports used to be served by full-sized jets (that flew mostly empty). Some are also haunted by memories of the breakup of AT&T, which was viewed as a messy failure for years. And many have spent too much time listening to the paranoid rantings of the fly by night “entrepreneurs” hoping to make a quick buck in telecom. Congress should relax, because technology has destroyed barriers to entry. Market forces will correct the problems.

Sadly, I do not think think the underlying political environment has improved since 1995. There is no constituent pressure for telecom reform, and there never has been. The telecom and cable industries have worked hard to educate Congress, but haven’t been willing to invest in public education because of the time and expense. The 1996 Telecom Act made it through despite a lack of public support, because some powerful legislators in both chambers were personally committed to it. But the law that passed was weak and ambiguous.