Digital Policy Institute

Looking Clearly Through the Telecommunications Fog of War

By Barry D. Umansky

There's now an intense battle going on in our statehouse.   Often incendiary volleys are now being exchanged between the supporters and opponents of SB 245 – the "Telecommunications Reform" legislation pending in the Indiana legislature.   Many of the attacks on the legislation target the small stuff, such as arguing that some local telephone rates of a relatively tiny number of customers could go up a bit.  That might – or might not – be the case.  And if it is, steps can be taken to aid that limited number of  consumers in paying their phone bills.

But, it's time to focus more squarely on the broader impact that passage, or defeat, of this legislation would mean for Indiana, my newly-adopted home state.    The choice before our legislature is clear:  do we maintain the status quo of arcane and unnecessary regulation that will limit our citizens' choices for traditional and newly-emerging communications services, or do we provide a climate conducive for communications companies of all shapes and sizes to invest and provide competitive services in the Hoosier state?   The choice is clear, and the time for decision is drawing near.

Virtually my entire professional career has been involved in communications regulation, including several years as an attorney at the Federal Communications Commission in Washington, D.C.   To be sure, telecommunications regulation does have its place; and in many circumstances it's vital, such as ensuring efficient emergency communications, universal access to basic phone service, fair and honest business practices and consumer protection where companies fail to live up to their promises or adhere to accepted standards of behavior.   However, much of the telecommunications regulation found in the Hoosier state now serves as a superfluous surrogate for what should be the forces of a free marketplace.

In so many areas of commerce and technology we've seen regulatory barriers and burdensome regulation fall in favor of proven reliance on marketplace competition among companies given a chance to fight the fair competitive fight on the proverbial "level playing field."   For example, over the past three decades much of the onerous and picayune regulation of broadcasters – regulation established at a time when there were   only three TV networks, no VCRs, no DVDs, no cable TV service and no satellite TV nor satellite radio service – has been jettisoned on the ground that full competition among audio and video providers makes that former regulatory model irrelevant. A similar legislative transformation now should be adopted here in Indiana for telecommunications providers.

The Indiana regulatory scheme now in place was created decades ago, and is based on concerns that no longer are valid.   At a time when competitors were few and analog technology provided the potential for only limited service, Indiana made its choice to, for example, regulate rates for service and maintain barriers to entry.  But now the telecommunications (digital phone, video, broadband internet access, etc.) world has changed.  

In many other states, new competitors and long-established companies are on the scene, providing all kinds of broadband services to the home and to the business community.   Those states are offering a climate favorable not only for all telecommunications companies to invest in-state, but also for all in-state businesses to have ready and price-competitive access to broadband – the fuel for our new economy.    At Ball State, our students are now "hooked on broadband."  In fact, our university now leads ALL other colleges and universities in the nation in terms of the availability and use of wireless, broadband communications on a campus.   It's not just the brightest minds in the graduating class that are hooked.  So are established businesses and new forward-thinking entrepreneurs seeking places to locate their operations, hire their employees and provide services to the public.  Educated people and educated companies simply won't spend time or do business where they don't have widespread access to multiple forms of broadband services.

In Indiana we surely have some broadband services.  However, full competition – and full benefit to people and our businesses – cannot be achieved until all telecommunications companies are allowed to compete under the same deregulated playing field.    Whether it's provision of phone service, broadband internet access, cable-like video services or any other form of electronic communications, our legislature must break down barriers to entry, eliminate unnecessary pricing controls and remove outmoded local and municipal regulation of what indeed are statewide, national and global services.    If not, bright people and bright businesses will look elsewhere.

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Barry D. Umansky, a practicing communications attorney at a firm in Washington, DC, also is a Research Fellow with the Digital Policy Institute at Ball State University and holds the Edmund F. and Virginia B. Ball Chair of Telecommunications at Ball State.