Telecommunications

Senator James DeMint (R-SC) has introduced the Digital Age Communications Act which was developed by a group of scholars led by the Progress & Freedom Foundation’s Randolph J. May and Professor James B. Speta of the Northwestern University School of Law. PFF’s Adam Thierer identified the basic problem best when he observed that “although the communications / broadband marketplace is becoming one giant fruit salad of services and providers, regulators are still separating out the apples, oranges, and bananas and regulating them differently.” The proposal introduced by Senator DeMint would solve this problem by regulating services which are alike from a consumer perspective similarly. A second problem is that the FCC has been governed by a completely vague “public interest” Read More ›

A first-rate report describing the shortcomings of Universal Service and suggesting several options for reform has been issued by the Progress & Freedom Foundation. The report is timely because a lot of service providers support a “numbers-based” contribution mechanism designed to spread the cost of Universal Service to include any service that connects to the telephone network and uses an assigned number. Overall, the report confirmed by own impression that Universal Service is a classic example of “regulatory capture,” the theory that regulation can be manipulated by regulated firms to bring them unwarranted profits and thus actually harm the consumers (through artificially higher prices) that it purports to serve. The report doesn’t state this conclusion quite so candidly, though. It Read More ›

The Senate Commerce Committee has announced an ambitious set of hearings which will delve into every imaginable aspect of telecom reform — beginning in January with Internet porn and ending in mid March assuming everything goes as planned. Let’s see. 2006 is an election year, so there will be a desire to adjourn early and to focus on a limited number of issues with voter appeal. Uh oh. There will be new members in 2007 and a need to get organized and to refresh the record. Assuming there is agreement that telecom reform should be on the short list of major action items for the new Congress and considering that telecom reform usually has to be bipartisan (since, amazingly, Republicans Read More ›

After Hurricane Katrina hit New Orleans, we predicted satellite phones would finally emerge as a mainstream component in our communications infrastructure. According to this morning’s Wall Street Journal, it looks like we were right: What a change a Category 4 hurricane makes. A few years ago, demand for satellite phones was so tepid that the two largest U.S. manufacturers, Iridium and Globalstar LP, were forced to seek bankruptcy-court protection. But today satellite phones are among the hottest products in the telecom industry. Manufacturers have been deluged with orders since Hurricane Katrina revealed the weaknesses in the country’s land-line and cellphone systems. -Bret Swanson

There’s been much talk of a rewrite of the nation’s telecom laws in 2006, the 10th anniversary of the 96 Act. But last week in Washington, D.C., a senior official told Hance Haney, George Gilder, and me: “I think there’s a possibility there won’t be another telecom act — ever.” With politicians on Capitol Hill so disorganized, with the Administration’s time and energy consumed by other issues, with technology moving infinitely faster than politics, could this be? If so, it means the burden is on the FCC to hold the line and deregulate new technologies and new services. It also means states can’t wait for the federal government to act. Aggressive states, in fact, can now distinguish themselves and steal Read More ›

“Section 621 of the statute prohibits local authorities from granting exclusive franchises and from unreasonably refusing to award a second franchise.” FCC Chairman Kevin Martin told a trade group yesterday that the FCC should fulfill Congress’s directive that franchising authorities not grant exclusive franchises or unreasonably refuse to award additional competitive franchises. He has circulated a Notice of Proposed Rulemaking to his colleagues and plans for the Commission to consider the item next month. This is exactly the right thing to do, but it will be very controversial. Irrational local officials want to be able to tax IPTV to death and then blame the industry for taking too long to wire their communities. Congress should provide cover for Martin and Read More ›

On Monday morning I testified before the Indiana Joint Committe on Regulatory Flexibility. Sexy, I know. I was joined by Ray Gifford and John Rutledge of the Progress and Freedom Foundation. Some 30 legislators listened as Rutledge expertly surveyed the global economic scene, with emphasis on energy, telecom, and Asian growth. I described the American technology scene and tried to show how a number of recent events — eBay’s purchase of voice-over-IP provider Skype, Google’s entry into VoIP and even wireless infrastructure, Yahoo!’s invasion of Hollywood, and the CableCos’ and TelCos’ invasions of each other’s businesses — make our already antiquated telecom laws and regulations more useless than ever. Ray Gifford then offered a cogent history of telecom law at Read More ›

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 — Read More ›

Kudos to the House Energy & Commerce Committee for circulating a bipartisan draft broadband legislative proposal. Broadband Internet transmission services (BITS), Voice over Internet Protocol (VoIP) and Broadband Video Services (BVS) would be subject to exclusive Federal jurisdiction and would be free from any regulation of rates, charges, terms or conditions. A streamlined franchise process would let a BVS provider commence service within 15 days, and preferential treatment of broadband networks that are owned or controlled by cities would be prohibited. These provisions, if enacted, would provide clarity and certainty that are badly needed to attract investment. Some things about the proposal that are less than perfect. For example, the term “repeal” is never used. The FCC will likely grow Read More ›

There’s a suspicion that no one really cares about high-definition TV. That’s why broadcasters are planning more local news, more local weather, more local sports, educational and children’s programming – more of everything – in standard-definition. But not without assurances that cable systems will carry the additional channels. Cable systems were built with private capital. And the cable industry is facing a competitive onslaught from the likes of DIRECTV, DISH Network and now SBC, Verizon and others. Yet they would have to allocate up to 6 channels to each local broadcaster if Congress mandates multicast must-carry. The justification for even the current level of must-carry is eroding. Expanding the requirement would simply restrain investment and innovation that much further. If Read More ›