Telecommunications

This week Illinois Gov. Pat Quinn signed Senate Bill 107, which modernizes the Illinois Telecommuncations Act. According to a press release,

Investment in broadband and wireless technology is a key to creating better jobs and providing unique educational opportunities across Illinois,” said Governor Quinn. “I am proud to sign this law to encourage private investment in these critical technologies, which will put more people to work and protect consumers.

Also, Ohio Gov. Ted Strickland signed Senate Bill 162, which updates Ohio’s seriously outmoded telephone regulations. According to a statement by the governor,

This bill is common sense regulatory reform. It modernizes Ohio’s telecommunications laws, even removing more than 50 references to the ‘telegraph’ in the Ohio Revised Code. By reducing archaic red tape, we are making the state more competitive and sending a clear message to telecommunication businesses that we welcome your investments in Ohio.

Georgia Gov. Sonny Perdue signed House Bill 168 on June 4.
Telecom regulatory reform is urgently needed to protect and promote investment, innovation and consumer choice. George Gilder and I have authored several reports (see this, this, this and this) documenting the problem and making several recommendations. The Illinois, Ohio and Georgia legislation include many of the ideas which are needed to spur critical private sector investment in broadband infrastructure which will lead to job creation and retention.
A report by Connected Nation projects a reasonably-achievable 7 percent increase in broadband adoption would produce over 105,000 jobs in Illinois, 96,000 jobs in Ohio and 71,000 jobs in Georgia annually.. These jobs would not only in be communications equipment and services, but also in manufacturing and service industries (especially finance, education and health care).

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Congress will revisit the Communications Act of 1934 (see this and this) in the aftermath of an appellate court decision limiting the Federal Communications Commission’s ability to regulate the Internet. “Stakeholders” will be invited to participate in a series of bipartisan, issue-focused “meetings” beginning in June, according to the congressional statements. Hopefully congressional leaders are contemplating a transparent process consisting of public hearings. If they are planning closed-door listening sessions with special interest representatives, that could encourage self-serving agendas and obscure horse-trading which can wind up costing consumers a bundle. Before it wrote the Telecommunications Act of 1996, the Senate Commerce Committee alone compiled an 817-page hearing record (S. Hrg. 103-599) on the basis of hearings on Feb. 23, Mar. Read More ›

Telecommunications reform (HB 168) was amended in the Georgia State Senate to protect the Public Service Commission’s authority to resolve consumer complaints against providers of old-fashioned telephone service. Good politics, perhaps, but PSC jurisdiction for consumer issues is redundant since the Governor’s Office of Consumer Affairs already protects consumers. And although it may sound counterintuitive, PSC authority can actually harm consumers by restraining full and fair competition. That’s because the PSC only has jurisdiction to resolve consumer complaints affecting wireline telephone service, but not wireless or VoIP services with which they compete. If the PSC isn’t careful, it can create unequal marketplace advantages and burdens depending on the type of technology competitors use to deliver their services. Nevertheless, HB 168 Read More ›

The U.S. Court of Appeals for the D.C. Circuit ruled that the authority the FCC used to regulate Internet access providers is very limited. The ruling is obviously a victory for broadband Internet access providers. But it is also a victory for the rest of us. As the court noted, the legal interpretation the FCC fought to defend “would virtually free the Commission from its congressional tether.” In Comcast v. FCC, the court said it was okay for Comcast to discriminate against peer-to-peer file sharing as necessary to manage scarce network capacity. The opinion was written by Judge David S. Tatel, a Clinton nominee. The question before the court was whether the FCC has any jurisdiction to regulate Internet access Read More ›

The National Broadband Plan is going to take a while to digest. The following recommendations are included in the description of how the FCC plans to subsidize broadband — which may be necessary if it frightens away private investment with network neutrality regulation which deprives private investors of a fair return on their capital: RECOMMENDATION 8.2: The FCC should create the Connect America Fund (CAF). (p. 145-46) RECOMMENDATION 8.3: The FCC should create the Mobility Fund. (p. 146) RECOMMENDATION 8.4: The FCC should design new USF funds in a tax-efficient manner to minimize the size of the gap. (p. 146) RECOMMENDATION 8.6: The FCC should take action to shift up to $15.5 billion over the next decade from the current Read More ›

Tom Tauke, a top Verizon executive: In my view, the current statute is badly out of date. Now is the time to focus on updating the law affecting the Internet. To fulfill broadband’s potential it’s time for Congress to take a fresh look at our nation’s communications policy framework. Tauke’s top recommendations include: A behavioral advertising policy that requires an easy to use process for affirmative consent from a user before that user can be tracked on-line should apply to all players engaged in behavioral advertising, regardless of where they sit in the space and what technology is used. Competitive subsidies that are technologically neutral and targeted solely for the benefit of consumers, not corporate intermediaries, would be one alternative Read More ›

The Washington Post’s reaction to the National Broadband Plan that was deemed approved and issued with fanfare by the FCC this week: BY THE Federal Communications Commission’s own account, broadband use in the United States has exploded over the past decade * * * * So it is curious that the FCC’s newly released National Broadband Plan faults the market for failing to “bring the power and promise of broadband to us all” — in reality, some 7 million households unable to get broadband because it is not offered in their areas. Such an assessment — and the call for government intervention to subsidize service for rural or poor communities — is premature, at best. * * * * it Read More ›

Former FCC Chairman Reed E. Hundt

Notorious former regulator Reed Hundt admitted he tried to screw telephone companies and broadcasters during a session at Columbia University, according to Harry Jessell at TVNewsCheck.
“In other words, we stole the value from the telephone network and gave it to … society. When I say we stole it, it was a government rule that produced this outcome.”
If this doesn’t sound Nixonian, it ought to. It was Nixon who famously said, “If the President does it, it is not illegal.” But the president is not above the law, and he was forced to resign.
Also, one cannot steal from a company, although this point is often overlooked. One can only steal from a group of investors, employees and/or consumers. They are the ones who ultimately pay.
While the FCC was stealing from the communities of interest represented by the telephone companies, Hundt said, it also tried to repress broadcasting: “This is a little naughty: We delayed the transition to HDTV and fought a big battle against the whole idea.”
Hundt thought his actions all served a higher purpose, i.e., “We decided … that the Internet ought to be the common medium in the United States and that broadcast should not be,” he said. “We also thought the Internet would fundamentally be pro-democracy and that broadcast had become a threat to democracy.” Huh?

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<a href=http://www.iltechpartner.org/beta/wp-content/uploads/ITP_ILBCC_ILHCC-Study.pdf We have completed a new paper examining the need for regulatory reform in Illinois for the Illinois Technology Partnership. Illinois was one of the first states to take the first step in permitting competition in the local telephone market. But it failed finish the job. In 1985, the Illinois General Assembly declared that “competition should be pursued as a substitute for regulation,” delivering new technologies, improved service quality, choice among telecommunications providers and ultimately lower prices for consumers. The goal of the 1985 act, which was to open the market to competition, has been achieved, but not the task of ensuring that consumers will reap the full benefits of competition — which requires eliminating legacy regulation that is Read More ›

The Georgia State Senate approved a sweeping reform of the state’s telecommunications laws by a vote of 46 to 4 (see HB 168, as passed by the Senate). The Senate bill Eliminates legacy telephone regulation that restricts competiton by creating artificial competitive advantages and disadvantages so that VoIP, wireless and wireline carriers will all have an equal opportunity to compete. Reduces inflated intrastate access charges for smaller rural telephone service providers and new entrants to the same level as interstate access charges. Sunsets Georgia’s Universal Access Fund, after providing a partial replacement of lost access revenues for ILECs who provide high-cost services (subject to a fully contested PSC hearing before allowing any fund distribution). HB 168 now goes back to Read More ›