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18 Years – Time for an Update

vintage telephone

Today marks the 18th Anniversary of the signing of the 1996 Telecom Act. In these 18 years the communications market has changed dramatically – change that warrants an update to our laws. We are all familiar with the recent explosion of services riding over our networks, but a simple thought experiment illustrates just how dramatic the changes of the last twenty years have been. Imagine if Congress had enacted the Telecommunications Act of 1999 instead of the Telecommunications Act of 1996. Would encouraging facilities-based competition in an attempt to build a duplicative phone network have seemed wise when by then it was clear broadband networks were key? Would the rise of the Web and early IP voice communications have given us pause? The changes we have witnessed since the ’96 Act represent a break in our ability to easily understand and predict this complex sector. It is time to update the Act, but not in a way that assumes to know what direction or velocity our communications and media markets are heading or what would be best for them.

In 1996 voice, video, and data were totally separate services and came into our home over different wires.  Soon after the ’96 Act, communications began to converge on the IP platform. With this ongoing convergence comes increased competition and dynamism in communications markets. Many laws, especially those designed for regulating legacy services in a monopoly era, no longer make sense where competition is established. A general shift towards policing competitive markets will work better than up-front regulation. Experience has shown that it can be very difficult to tell where it makes sense for the government to intervene.

The mistaken predictions of the ’96 Act should teach us to be humble in predicting communications technology and where the next competitor will come from. Today we have commercial carriers pushing fiber networks into some cities, LTE becoming a stronger broadband competitor, cable companies building out WiFi, and over-the-top companies providing video. No conversation about unpredictable changes in communications competition is complete without mention of Dish – with the Ninth Circuit giving a thumbs-up to the Hopper, a spectrum buying spree, and around 14 million rooftop “towers” across the U.S., there is no telling what to expect. The notion that our broadband market has fallen into some sort of static equilibrium without competition is not only empirically wrong but incredibly myopic. The upheaval since the ’96 Act should caution us against taking strong regulatory action based on fleeting understandings of the market.

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