Streamlining Regulations

Jonathan Spalter of USTelecom wrote a recent blog calling on Congress to update regulations for the telecom industry. USTelecom is a lobbying arm representing the largest telcos, but which also still surprisingly has a few small telco members. I found the tone of the blog interesting, in that somebody who didn’t know our industry would read the blog and think that the big telcos are suffering under crushing regulation.

Nothing could be further from the truth. We currently have an FCC that seems to be completely in the pocket of the big ISPs. The current FCC walked in the door with the immediate goal to kill net neutrality, and in the process decided to completely deregulate the broadband industry. The American public hasn’t really grasped yet that ISPs are now unfettered to endlessly raise broadband prices and to engage in network practices that benefit the carriers instead of customers. Deregulation of broadband has to be the biggest regulatory giveaway in the history of the country.

Spalter goes on to praise the FCC for its recent order on poles that set extremely low rates for wireless pole connections and which lets wireless carriers place devices anywhere in the public rights-of-way. He says that order brought “fairness’ to the pole attachment process when in fact the order was massively unbalanced in favor of cellular companies and squashes any local input or authority over rights-of-ways – something that has always been a local prerogative. It’s ironic to see USTelecom praising fairness for pole attachments when their members have been vehemently trying to stop Google Fiber and others from gaining access to utility poles.

To be fair, Spalter isn’t completely wrong and there are regulations that are out of date. Our last major telecom legislation was in 1996, at a time when dial-up Internet access was spreading across the country. The FCC regulatory process relies on rules set by Congress, and since the FCC hasn’t acted since 1996, Spalter accuses Congress of having “a reckless abdication of government responsibility”.

I find it amusing that the number one regulation that USTelecom most dislikes is the requirement for the big telcos make their copper wires available to other carriers. That requirement of the Telecommunications Act of 1996 was probably the most important factor in encouraging other companies to compete against the monopoly telephone companies. In the years immediately after the 1996 Act, competitors ordered millions of wholesale unbundled network elements on the telco copper networks.

There are still competitors that using the telco copper to provide far better broadband than the telcos are willing to do, so we need to keep these regulations as long as copper remains hanging on poles. I would also venture a guess that the telcos are making more money selling this copper to the competitors than they would make if the competitors went away – the public is walking away from telco DSL in droves.

I find it curious that the telcos keep harping on this issue. In terms of the total telco market the sale of unbundled elements is a mere blip on the telco books. This is the equivalent to a whale complaining about a single barnacle on his belly. But the big telcos never miss an opportunty to harp about the issue and have been working hard to eliminate sale of copper to competitors since the passage of the 1996 Act. This is not a real issue for the telcos – they just have never gotten over the fact that they lost a regulatory battle in 1996 and they are still throwing a hissy fit over that loss.

The reality is that big telcos are less regulated than ever before. Most states have largely deregulated telephone service. The FCC completely obliterated broadband regulation. While there are still cable TV regulations, the big telcos like AT&T are bypassing those regulations by moving video online. The big telcos have already won the regulatory war.

There are always threats of new regulation – but the big telcos always lobby against new rules far in advance to weaken any new regulations. For example, they are currently supporting a watered-down set of privacy rules that won’t afford much protection of customer data. They have voiced support for a watered-down set of net neutrality rules that doesn’t obligate them to change their network practices.

It’s unseemly to see USTelecom railing against regulation after the telcos have already been so successful in shedding most regulations. I guess they want to strike while the iron is hot and are hoping to goad Congress and the FCC into finishing the job by killing all remaining regulation. The USTelcom blog is a repeat of the same song and dance they’ve been repeating since I’ve been in the industry – which boils down to, “regulation is bad”. I didn’t buy this story forty years ago and I still don’t buy it today.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s