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Press Release

    Texas State Senate: Pass Telecom Reform

    05/17/2005

    Mr. Chairman and members of the Senate Business and Commerce Committee, my name is Tina Peyton, I am the Texas Field Director for FreedomWorks. FreedomWorks recruits, educates, trains and mobilizes hundreds of thousands of volunteer activists to fight for less government, lower taxes, and more freedom. FreedomWorks believes individual liberty and the freedom to compete increases consumer choices and provides individuals with the greatest control over what they own and earn. FreedomWorks' aggressive, real-time campaigns activate a growing and permanent volunteer grassroots army to show up and demand policy change.

    I am here today representing the almost 32,000 members of Texas FreedomWorks and I would like to draw your attention to the potential dangers of excessive regulation and continued price controls in the Texas telecommunications market. Recently, the House Regulated Industries Committee passed two important bills that will create a truly competitive market that allows all providers to compete for customers. This means consumers will be able to choose from a wide range of options and technologies, including new broadband and Internet telephone services as well as state-of-the-art video services. At the same time, these bills create incentives for providers to make critical investments that upgrade the infrastructure to serve consumers. Today, the Senate has an opportunity to pass its own legislation to modernize telecommunications in Texas.

    FreedomWorks believes that reform is important for consumers because it would remove unnecessary regulatory barriers that have hampered growth in this important sector of the Texas economy. Reform would inject real competition into the telecommunications sector and brings Texas into the next era of technology. The goal should be to open the market, with the clear objective of providing consumers the widest possible choice in the market for telecommunications. At the same time, by creating a sensible market for telecommunications, reform would attract investment in the critical infrastructure required to serve consumers better. And as the number of providers expands, consumer choice increases and access to the latest technologies improves.

    Burdensome regulations have made it difficult, if not impossible, for providers of telecommunications services to offer the latest technologies to consumers, and the Senate should eliminate outdated regulations and clear the way for an open and competitive market. This would create incentives to invest in new technologies, such as fiber optics and combined voice, data, and video services that benefit consumers.

    There is little economic justification for the theory that telecommunications services only can be provided efficiently in a regulated industry. Today’s market is vastly different from the market of 10 years ago, with competition from wireless, cable, and satellite providers. Soon even power companies may enter the market with broadband over powerline technologies. This is hardly symptomatic of anti-competitive behavior. As technology has improved, new providers have entered the market to provide new products that offer individual consumers access to the latest technologies. The Senate bill should allow providers to implement these innovations in ways that help consumers.

    It is important to remember that markets are dynamic, not static. Innovation in new technologies has redefined competition in the telecommunications market. Applying old regulatory standards or definitions of markets in this emerging new market will only stifle competition and replace decisions made in the marketplace with decisions made by regulators or bureaucrats. This will hamper competition and delay innovation as firms in the marketplace must continue to satisfy regulatory oversight rather than the needs of real consumers in the marketplace. Antitrust laws exist and address concerns about illegal practices in the marketplace. Additional laws that increase the government’s presence in the telecommunications marketplace are not necessary. Any legislation reforming the telecommunications laws in Texas must focus on establishing an open and competitive market, not creating new government definitions that attempt to establish and govern this dynamic sector of the economy.

    The telecommunications sector has reached a critical juncture. Many providers have no incentive to build the networks of the future under existing regulations. The current rules were written to provide oversight in a world that no longer exists. The Senate should seek to establish a more competitive framework based on the realities of today’s marketplace.

    If consumers are to have access to the latest technologies at competitive prices, Texas must establish a true market for telecommunications. FreedomWorks believes that open competition among telecommunications providers holds great promise for consumers. When producers are forced to compete in the marketplace, consumers have enjoyed falling prices and greater choice. The House has passed legislation to promote a more competitive marketplace; now, the Senate has an opportunity to take an important step forward that facilitates this competition. We urge you to support a bill that promotes invigorated competition that would modernize this vital sector of the economy. Our mantra that good policy is good politics could not better apply here.