Regulations Out-of-Sync with Consumer Choice

Last week, the FCC announced the formation of a new task force with the purpose of investigating transition to new modes of broadband.  Called the Technology Transitions Policy Task Force, the commission will investigate the transition from our current broadband system, which is made up of copper wire and circuit switches, to one based on fiber, wireless and Internet Protocol (IP) technology.

While consumers are transitioning to new technologies by choice, regulations require broadband providers to run duplicative and redundant networks that are expensive and cumbersome.  For consumers to fully benefit from the transition, network costs need to be reduced in order to keep consumer prices low and attract industry investment into services that consumers want – services that enable faster and more reliable applications.  The FCC has an important role in making the regulatory transition match consumer choices.

The appointment of the commission is a welcome bit of news, one that is a long time coming.  One of the FCC commissioners, Commissioner Pai, has been calling for this movement for some time; and many in the tech industry, both in the policy and business worlds, have been calling for action for a while.  It’s important that the transition to newer and better technologies happen as quickly as possible.  Technology changes at a fast pace, and it’s important that the public policy governing this technology be allowed to flourish and not be hamstrung under onerous regulations.  These regulations hurt investment and hamper the progress of broadband build out across the country.

Many of the regulations governing much of the broadband industry are out of date.  For example, AT&T recently petitioned the FCC to make changes that would encourage more private investment into wireless broadband.  Currently, wireline telecom providers are governed by outdated rules on Local Exchange Carriers, which, as mentioned earlier, require them to run duplicative networks, both copper and fiber networks. Running these networks is costly and inefficient, but many companies are forced to run both networks using 1934 laws.  These outdated regulations force Internet providers to misallocate investments into older technologies, instead of focusing on what consumers want – an all-IP broadband system.

The FCC should work to deregulate the process of converting from copper-based networks to IP networks based on fiber and wireless.  They need to implement policies (and refrain from new ones) that encourage investment and in infrastructure and promote further competition in the broadband market.  Many of the rules and regulations currently in place pre-suppose a world where there are few networks and not very many options in service providers for our communication needs. This is no longer the case. The investment that would come from a deregulation posture would create thousands of jobs, not to mention the quickened pace of better and faster broadband networks that would ultimately facilitate commerce.  The FCC’s policies need to better mirror what’s happening on the industry and consumer demand.  Once these regulatory barriers to investment are brought down, a better and more streamlined transition to all-IP technology can begin.  And that is what consumers want.

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