Telecom Reform Campaign: What is Texas Waiting for?

Help Keep Texas A National Leader in Telecom!

The State of Texas can maintain a thriving competitive market for telecom and promote the adoption of new technologies by embracing free market principles that encourage job creation and capital investment. (click here to download critical information and talking points as well as a sample letter to the editor on this important issue.)

To the benefit of consumers, healthy market competition exists today in the Texas telecommunications sector.
Improvements in wireless service, the introduction of cable telephony, and emerging technologies such as Voice over Internet Protocol (VoIP), which allows consumers to make phone calls via the Internet, are all among the telecommunications choices for most Texans. The latest numbers from the FCC show that wireless subscribers have increased from 5.8 million in 1999 to 11.3 million in 2003, while landline service has decreased. The market is changing rapidly, providing consumers a wider array of products and services at competitive prices.

Current law creates an artificial market based on old technologies that actually hampers competition in today’s telecom market. In 1995, the Texas Legislature significantly amended the state’s Public Utility Regulatory Act (PURA) with regard to telecommunications. The goal of the bill was to increase competition in the telecommunications sector by requiring local phone companies to lease parts of their network to competitors such as AT&T and MCI. The legislation created a different set of rules for new competitors as opposed to incumbent providers. The new competitors face fewer rules in setting price and meeting service quality requirements. In addition, current state law does not prevent regulators from creating new burdens on incumbent phone companies to lease parts of their network at very low rates.

Outdated regulatory mandates stifle future growth in the telecom sector. Regulated prices for access to local networks are always set lower than the market rates, therefore giving little incentive for anyone to step in and improve critical telecom infrastructure. This is detrimental to the future of technology in telecommunications.

Texas legislators should continue to maintain the true competition now present and foster an open marketplace.
As the legislature begins to rewrite the old laws on telecom, it should identify outdated regulations that stifle competition while fostering growth of a new market that allows all providers—phone companies, cable companies, wireless companies and others—to offer consumers the best products at competitive prices.