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Democracy & Technology Blog Telecom reform in Mississippi

Proposed House Bill 825 would update the regulation of telecommunications services in Mississippi. Effective July 1, 2012, the Public Service Commission would no longer be authorized to regulate the rates, terms and conditions of single-line flat rate voice communication service, nor impose other regulation.
The bill also clarifies that nothing in Title 77, Chapter 3 (Regulation of Public Utilities) of the Mississippi Code may be construed to apply to video services, voice over Internet protocol services (“VoIP”), commercial mobile services, Internet protocol (“IP”) enabled services, in addition to broadband services.
The commission would continue to regulate intrastate switched access service, as well as arbitrate and enforce interconnection agreements between telecommunication providers. Providers of intrastate access and unbundled network elements would not be required to file financial, service quality or other information with the commission. Intrastate access fees would be the same as the fees for interstate access services.
Utility regulation was appropriate years ago when telephone service was furnished by monopolies. But the federal Telecommunications Act of 1996 removed legal barriers to competition, and now wireless providers, cable operators and others compete to provide voice service. Only about 16% of Mississippi voice connections were served by incumbent local exchange carriers (ILECs) subject to legacy utility regulation at the end of 2010, according to the Federal Communications Commission (see tables 9 and 17).
Continued regulation of competitive ILEC services is actually harmful to consumers, by forcing providers to maintain single-purpose voice networks when voice can be delivered over multifunctional broadband platforms at lower cost. The National Broadband Plan embraces a vision of the future in which the traditional circuit-switched telephone network will be replaced by an IP-enabled network, and the plan confirms that legacy telephone regulation is an impediment to a smooth transition (see p. 59).
As it becomes increasingly costly to maintain a legacy telephone network to serve fewer and fewer subscribers, there is a danger that telephone service providers may be forced to subsidize legacy service from wireless and broadband revenues, which is wasteful and inefficient. Forcing wireless and VoIP customers to subsidize legacy networks would penalize – and therefore diminish – investment and innovation in advanced new services.
At present, 44% of Mississippi households have a broadband connection over 200 kbps in at least one direction, and 11% have a connection at least 3 mbps downstream and 768 kbps upstream, according to the FCC (see tables 15 and 16). Nationwide, 13% of households have a broadband connection of at least 100 mbps in both directions (Table 5). Connected Nation concluded in 2008, when the FCC defined broadband as over 200 kbps in at least one direction, that a mere 7% increase in broadband adoption (similar to the household broadband adoption achieved in Kentucky, above the national average, by addressing local supply and demand issues) would create or save almost 19,000 new jobs per year in Mississippi. The jobs are not just in telecommunications equipment and services, but also in manufacturing and service industries (especially finance, education and health care).
By enacting regulatory reform so that all providers of voice services are subject to minimum regulation which does not discriminate on the basis of technology or history, just like in any competitive market, legislators will expand customer choice and ignite the broadband expansion necessary for economic growth, technological progress and ultimately lower prices.

Hance Haney

Director and Senior Fellow of the Technology & Democracy Project
Hance Haney served as Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute, in Washington, D.C. Haney spent ten years as an aide to former Senator Bob Packwood (OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee during the deliberations leading to the Telecommunications Act of 1996. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a B.A. in history from Willamette University and a J.D. from Lewis and Clark Law School in Portland, Oregon.