Views > March 6, 2006

Untangling the Next Telecom Act

By Craig Aaron

If what they say about those who fail to learn from history is true, it’s troubling that the 10th anniversary of the Telecommunications Act just passed with barely a blip outside the business pages.

The 1996 Act is the quintessential example of corrupt media policymaking. Hashed out behind closed doors by industry lobbyists with almost no public input, the bill killed local radio, gave away the public airwaves worth billions to the biggest media companies for free, and spawned a wave of consolidation that left consumers with higher prices and fewer choices.

At the time, most citizens—or even members of Congress—had no idea what the massive legislation contained. This was no surprise: In the nine months before the bill passed, the major networks aired only 12 stories about it—totaling 19 minutes. Big media companies, of course, were among the bill’s biggest beneficiaries.

Congress is reopening the Telecom Act again—and this time the future of the Internet is at risk. When lawmakers first began drafting the 1996 bill five years earlier, Web browsers didn’t yet exist—and the word “Internet” only appeared 11 times in the final text. But now that video, radio, telephone and the Internet all can be delivered over the same broadband connection, the regulatory lines must be redrawn.

Media consolidation in the 21st century also has a new face. In a 10,000-channel universe, power comes from owning the conduits to communications technology. The emerging “network giants”—like Verizon, AT&T, Comcast and Time Warner—already control millions of Americans’ access to the Internet as well as a large portion of the broadband “backbone.” They stand to make a killing if the new Telecom Act is shaped to their specifications.

Rather than one big omnibus bill, we’ll probably see a series of measures over the next two years—originating in the House and Senate Commerce Committees—that will change and add to current law, piece by piece. At the center of the debate will be three complex but crucial issues.

Net Neutrality The Internet always has been guided by the principle of “network neutrality”—meaning you can access any Web site, use any application and send any information without interference from your Internet provider. The network’s only job is to move data. But the biggest cable and telephone companies want to exploit their control over the “pipes” to squeeze out their competition—especially Internet phone and video services—and charge other content creators a premium to travel at the fastest speeds. They envision a two-tiered Internet with a wide-open express lane for themselves and their partners, and a winding dirt road for the rest of us. Opponents of this scheme are pushing to write net neutrality into law.

Community Internet High-speed Internet access is fast becoming a basic public necessity—like water, gas or electricity. Yet with 98 percent of the market dominated by the network giants, the United States has dropped to 16th in the world in broadband penetration. Hundreds of cities and towns are finding that the best path to universal, affordable Internet access is to do it themselves. The cable and telephone conglomerates want laws that outlaw municipal competition. But Congress has the chance to create a truly free market in which local governments are free to decide what best serves their citizens.

Video Franchising In exchange for letting the cable company operate as a monopoly and dig up the streets, cities negotiate “franchise agreements” that guarantee them fair rent, wiring for local schools and libraries, and funding for public access TV channels. But now the phone companies want to get in the video business—without haggling with local officials. While more competition would be good for consumers, the network giants are trying to shed obligations to offer universal service and to fund public access TV—often the last refuge for local news and government information. State- or national-level franchising may be inevitable, but it shouldn’t come at the expense of the public interest or local control.

How these new rules are written will have tremendous implications for the future of communications—and our democracy. Who will control the technology needed to access, create and share media? Will the broadest sources of culture and information be available? How will consumers be able to utilize these new communications networks? Will access be affordable and available to everyone?

As long as the network giants and their lobbyists can keep the discussion couched in technical terms, hidden behind closed doors and buried on the back pages of the newspaper, the needs of ordinary people will be left far behind. The last thing that the network giants want is for the public to realize what’s going on—which is why it’s never been more important to make your voice heard.

Russell Newman co-authored this column.

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• Reader Comments

  the 1996 act was not a success. The baby bells fought competition, interconnection agreements, tooth and nail and have tried to carve out the internet.

  How many residential customers have much choice for local phone service, for example. Until recently, when cable started to offer it, most had none, and now have maybe just the cable company as an alternative. Even more recently, internet phone has emerged, but as a primary phone service, can be problematic. Cable necessitates bundling with cable TV.

  How many realize that the 1996 bill was supposed to create competition and healthy choices for local phone service, just like we had for long distance carriers? Not many have a clue. The only fierce competition that emerged for local phone service was for business customers. This was the way competitors started out and gained an edge, by cherry-picking lucrative business customers.They never really got beyond that. The incumbent carriers were there ready to pay fines to regulators and bury their competitors in litigation.

  The nutty thing too, was many new competitors were laying down their own fiber optic lines in the most business-dense areas of cities, in addition to entering into interconnection agreements with the incumbent carriers. The extra lines are pretty redundant, when you think about it. More infrastructure is OK, but redundancy over redundancy was a bit much. You have to wonder if some sorts of services should be deregulated at all. 

  I haven’t seen deregulation in many industries that didn’t ultimately benefit business over consumers and raise prices, the exact opposite of the supposed intent.

  Airline dereg lowered the price of airfares and long distance phone rates dropped. But the rest of telecommunications deregulation only gave companies all the benefits of their former mopnopolies and none of the state and federal oversight. This is true of energy/electric deregulation too.  We have been suckered. A new bill in the climate on Capitol Hill these days could only be a disaster.

  Posted by marge on Apr 2, 2006 at 5:03 PM

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