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Press Release

    Tech Bytes - Tid Bits in Tech News: All Aboard! The Deregulatory Train is Leaving Town for High-Speed Telecom Services

    07/19/2000

    Yesterday, the House Judiciary Committee held a hearing on H.R. 1685 and H.R. 1686. Both pieces of legislation – “The Internet Growth and Development Act” and “The Internet Freedom Act” respectively – would take one step forward and one step back for consumers of communications services.

    Provisions that would heap new “forced access” regulations on existing high-speed networks would cancel out this benefit.

    The legislative proposals would move deregulatory efforts forward and decrease barriers to the development of new high-speed communications networks. Unfortunately, provisions that would heap new “forced access” regulations on existing high-speed networks would cancel out this benefit.

    Just as it would be impossible to get on a train going in two directions at once, it is difficult to support any effort that would include onerous new regulations. Consumers would benefit from deregulation that would permit inter-LATA (which would allow firms to go beyond their local calling area) data transmission by all firms. However, forced access requirements would unfairly discriminate against one segment of the market – improved cable networks – for high-speed services.

    If a cable modem was the only way to deliver high-speed Internet service to consumers then advocates of forced access requirements might be worried about antitrust law or monopoly power. However, as the deregulatory aspects of these bills make clear, there are alternatives to cable modems, such as ISDN or DSL. Deregulation would enhance this competition.

    The two biggest cable companies, AT&T and AOL-Time Warner, have recently announced plans to provide access to their networks to competitors after existing contracts expire. This decision underscores the competitiveness of the high-speed Internet market: By opening their lines to additional programming, these firms provide a reason for consumers to select cable modems over alternative high-speed Internet connections.

    If the overarching goal of H.R. 1685 and H.R. 1686 is to put consumers in charge of decisions about which Internet service is best suited to their individual needs, then the legislation is halfway done. An alternative, H.R. 2420, “The Internet Freedom and Broadband Deployment Act of 1999,” takes a more direct route toward competition. It does not include the forced access regulatory provisions of either bill before the Judiciary Committee.

    Testimony of Dr. Jerry Ellig, Research Fellow, Citizens for a Sound Economy Foundation Before the U.S. House of Representatives Committee on Commerce, Subcommittee on Telecommunications, Trade, and Consumer Protection.

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