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Make Regulation the Exception Rather than the Rule
In the last couple of years, there’s been plenty of talk in Washington about reforming communications policy.Efforts by Congress to re-write the major telecommunications laws died at the end of last year when the previous Congress adjourned before the holidays.But with a relatively new Congress in Washington, we have a fresh opportunity to think about what makes sense for the future of communications policy.
The level and intensity of competition in today’s communications marketplace demand that “reform” be something dramatically different – something that reflects the fundamental change that has and continues to occur in the marketplace.
A deregulatory environment in Washington through the better part of the past decade has helped fuel cable’s growth and stimulated enormous competition in the market.
In video, we’re going toe to toe with our satellite competitors, providing many of our 33 million digital cable customers with vibrant video on demand and many of the more than 30 cable channels transmitting in high definition.
Cable’s jump-start of the high-speed data marketplace more than a decade ago has led to better than 30 million cable high speed Internet customers today, though the phone companies are charging hard with a competitive DSL product.
And our efforts to bring the first-ever real competition to the phone market have earned us more than 10 million cable phone customers, even while the Bell companies still serve more than 85 percent of the voice telephone market.
Our ability to provide consumers with so many competitive choices flows from our $110 billion upgrade to broadband, done with private risk capital in a competitive market, and without the benefit of a government regulator to guarantee a return on investment or to provide other special protections.
Given the scope and pace of these advances, it’s long past time to consider a fundamental shift in how we take into account today’s competitive and diverse communications environment.
NCTA has for many years advocated we should dramatically reduce if not eliminate economic regulation as facilities-based competition succeeds, while retaining carefully targeted social goals such as maintaining the Universal Service Fund, assisting law enforcement, and providing E-911 service.
But why shouldn’t government policy make regulation the exception rather than the rule?
This is hardly revolutionary. It is, after all, the way we approach just about every other sector of the economy.
One idea would be to provide a role for the FCC more like that of the Federal Trade Commission, with the authority to intervene in the marketplace only if it determines that marketplace competition wouldn’t adequately protect consumers against unfair methods of competition or unfair and deceptive practices. There would be a presumption against regulation, and in fact all FCC regulations would sunset in five years.
Trusting markets to serve consumers is absolutely central to real reform. Such an approach, implemented appropriately, would sweep away much of the accumulated regulatory baggage that burdens the communications industries, including rate and entry regulation, detailed oversight of service quality, prior regulatory approval to construct new facilities, government mandated access to distribution platforms, and intrusive content regulation.All of these could be replaced by a more limited regime that relies to the maximum extent on market forces to determine the price, availability, and quality of service offerings.
As the new Congress examines the communications marketplace this year and next, I hope it will consider whether the time has come to base competition policy on the realities of the competitive marketplace we have today.
