Competition Will Break Barriers

Posted June 1, 2005 at 1:03pm

We are realizing the goal of the 1996 Telecommunications Act to “promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.”

The promise of technology and telecommunications shapes every segment and sector of our country, from the economy to health care to education to security. Rural states like mine watch as distance becomes irrelevant. Competition in all-distance, all-service offerings

— voice, video, data and wireless — is taking root. At the same time, major acquisitions and mergers are occurring in every communication sector: cable, wireless and traditional telephone companies. In this context, will Congress pursue free-market policies to continue competition and investment that will produce lower costs, greater consumer choice and innovation? Or will legislators move to limit competition and allow duopolies and oligopolies to dominate in most markets?

Now, traditional players offer services once limited by technology to other industries. Today cable companies enter the voice market, telephone companies enter the video market, high-speed broadband networks and the wireless industry compete with both. Each seeks the quadruple play of voice, video, data and wireless. Competition rests on price, user ease, efficient service, customer support, exclusive content and value-added services. Today, Internet Protocol-based services are dramatically changing the marketplace and consumer choices, and challenging existing regulations.

Government response to this convergence involves issues of fairness in regulation, access to networks and content, federal preemption and certainty in the market. In addition, we must maintain and modernize the universal service of the future.

Congress hears a lot about “regulatory parity.” When a consumer receives a package at their door, they don’t care if it was transported by truck, train, ship or plane. What matters is that the price is low, the service excellent and the package on time. The same is true with digital packets: phone line, Internet, cable or wireless. But just as the remnant of a historical burden prevents “parity” in transport commerce, so the legacy of the 20th century communication policies affect how we regulate the telecommunication industry.

Today we cannot, nor should we, achieve regulatory parity — that is taxing and regulating each of these different networks the same way. But it is possible to have fairness and move toward deregulation. I have five sons, ranging in age from 6 to 15 years old, and I treat my sons differently at various stages in their life. While I treat them differently, my hope is that I treat them fairly, so at the end of their youth, when they reach adulthood, my wife and I will release them into “deregulatory parity.” As the telecommunication industries mature, we will seek to consistently deregulate on all sides without imposing old regulations on new entrants, until we can achieve the least point of regulation, and all markets have healthy and vibrant free-market competition.

Competition requires continued access to incumbent local exchange carrier networks, and interaction between those incumbent networks and new advanced networks. The pricing of access should be one that incents competitors to build more of their own network capabilities. With multiple networks supporting both consumer demands and public necessities, we can decrease network regulation until the only requirement is interconnection among networks, and minimal access to prevent bottlenecks and competitive impairment.

One of the items of government intrusion we must prevent in this age of global communication is state-level regulation of Internet services. A patchwork of 50 regulators attempting to tax digital packets over the Internet which may be voice, video or e-mail and which may be going to and from individuals from other parts of the world is not only infeasible but also stifling for innovation and competition. Federal pre-emption under the Interstate Commerce Clause of these global telecommunication services will and should be a coming step in legislation.

Finally, Congress and the Federal Communications Commission must provide certainty to the marketplace. With certainty comes investment, investment breeds innovation, and innovation increases competition creating convergence and improved services for consumers. Congress should set a deadline for the FCC to complete its rulemakings on reform of the intercarrier compensation regimes and the federal universal service fund.

New technology drives our update of the 1996 Telecommunications Act. Our principles of reform should be:

1. Competitive neutrality,

2. technology neutrality and

3. flexibility.

It must establish social obligations in a responsible manner for emergency-911, law enforcement and disabled access. We are coming to a time in Congress, just as we have in technology, where public policy views will converge to ensure a competitive and effective communications marketplace beneficial to the American people.

Rep. Chip Pickering (R-Miss.) is the vice chairman of the Energy and Commerce Committee, an Assistant Majority Whip and co-chairman of the Congressional Wireless Caucus.