Broadband telecommunications--technology and services that spur access to the Internet and high-speed telecommunications networks--is quickly becoming the hottest topic in the communications lexicon. This evolving industry promises to offer people increased online capabilities of higher quality and at more reasonable prices than they now enjoy. The demand for broadband services is skyrocketing, as Peter Huber, a senior fellow at the Manhattan Institute for Policy Research, explained to the Congress last March: "Demand for digital bandwidth is increasing at annual rates in the range of 50 to 200 per cent."Unfortunately, Huber also pointed out, existing phone, cable, broadcast, wireless, and satellite networks still rely, in significant part, on yesterday's analog technology, and they are already stretched to capacity. Systems deployed a decade ago cannot begin to accommodate five-fold increases in traffic. So new networks must be built.... Hardware manufacturers have to build them and deploy them. Fast.This growing "broadband crisis" is generating concern among policymakers, regulators, corporate officials, academics, and industry watchers who want to ensure that broadband services are rolled out in a timely fashion to as many Americans as possible. Indeed, several policymakers advocate continuing today's outdated and unworkable regulatory regime.
Instead of following the traditional regulatory model, policymakers should consider adopting the model of legal governance that allowed the computer industry to become so lucrative and successful in less than two decades. The government's "hands-off" approach incorporated simple, uniform, and time-tested standards for operating in a free market, such as strict contract enforcement, patent and trademark protection, property rights, voluntary common-law resolution of disputes, voluntary standard-setting, and open national markets for goods and services. The result has been stunning. The computer industry has grown--in just 15 to 20 years--into one of America'sleading exporting and job-creating industrial sectors. Competition is vigorous, choices are plentiful, prices are low, and entrepreneurialism remains vibrant.
If Congress were to apply the lessons learned from the computer industry's experience to telecommunications policy, it would encounter great success with encouraging investment in and deployment of broadband services across America. To do so, Members of Congress should ensure that any bill proposing to reform the telecommunications sector embodies the following principles that were so evident in the development of the computer industry:
Deregulation and free markets. Voluntary market-based applications should govern the development of this complex industry, not new forms of regulation or managed markets. Legal simplicity and stability. Current rules and standards governing the telecommunications sector must be simplified. Uniformity and regulatory parity. The same rules must apply to all players, and archaic regulatorydistinctions should be wiped off the books.n A single open market system. State and local regulations that interfere with interstate communications commerce must be prohibited. Agency constraint and downsizing. Regulatory interference must be reduced and agency missions and funding decreased, not expanded.Change may well be the only constant in the telecommunications world today, and to keep up with the rapid technological changes in this industry, the legal environment governing the market must undergo rapid change as well. Most industry experts admit that there is no longer an "essential facility" or "bottleneck monopoly" in the communications sector, especially in the broadband data segment. Therefore, legislative attempts to micromanage the evolution of this market, or to pigeonhole broadband technologies or providers into the outdated and unworkable regulatory distinctions and regimes of the past, are little more than misguided policies that will thwart broadband investment, innovation,entrepreneurialism, and deployment. The hands-off approach that helped propel the computer industry to remarkable success is a superior alternative to regulation that Congress should embrace enthusiastically.
The author is a fellow in economic policy in the Thomas A Roe Institute at the Heritage Foundation.
Used with permission from Heritage Foundation
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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