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Telecommunications Reforms For Today's Digital Economy | Commentary

We live in a time when we can access information pretty much anywhere, at any time, whenever we want. The rapid deployment of broadband networks have made available a plethora of consumer services and applications in the digital age. In two short decades consumer choice has expanded from limited offerings of voice and video from wired telephone and cable companies to one stop shopping for our voice, video and data needs from wireless, cable and traditional telephone companies.

According to a recent Internet Innovation Alliance report, these new communications technologies and services in the market have resulted in most consumers moving away from traditional telephone service to voice services provided by Internet Protocol (IP)-based wired and wireless broadband networks. Anyone who has a cellphone or who gets telephone service from a cable provider has already made this switch. 5.4 million Americans make the switch from wire-based services, upgrading their phone to run on wireless and internet based networks every year.

The Telecommunications Act of 1996 (96 Act) has helped make the world of digital convergence a reality. The 96 Act freed cable, telephone carriers, and wireless to enter into each others’ markets promoting competition which unlocked technological innovation and unparalleled access to the Internet. Yet, while the world of phones, wireless service, and the Internet has completely changed over the last 18 years, the nation’s telecommunications regulatory framework remains the same. Technological change and altering consumer preferences in the digital marketplace now make clear that the 96 Act is ill equipped to address the current technology marketplace of the broadband age.

With the 96 Act becoming increasingly outdated, the House Committee on Energy and Commerce is now seeking recommendations on how best to modernize our existing telecom laws. Creating a new regulatory framework to provide greater incentives for broadband deployment would spur investment and innovation in America’s 21st Century digital economy.

As a result of today’s outdated rules, the nation’s telephone companies collectively spend more maintaining these outdated networks than investing in modern broadband networks. In 2002, more than 90 percent of American homes had a wire line telephone connection; today that number stands at less than 26 percent. Put another way, 99 percent of all U.S. communications traffic is now carried over platforms in IP, while legacy telephone voice traffic is now less than one percent of all communications traffic. As the number of subscribers on the old telephone network continues to decline, policymakers must consider whether the upkeep is worth it. Devoting precious capital to maintaining the aging telephone network wastes resources that could otherwise be building new high-speed broadband networks throughout America.

As consumers continue to flee the aging telephone network, modernizing our telecommunications law is essential to provide the right incentives to accelerate high-speed broadband deployment and establish a regulatory framework that advances key consumer protections unique to 21st century broadband networks. Rules designed to address the antiquated telephone system during a monopoly era are ill equipped to promote a level playing field among numerous technologies and high speed broadband network providers. Robust and vibrant wireless and wired broadband is key to advancing economic opportunity, education, and civic engagement, and strengthening our global competitiveness.

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