Guest Commentaries:
It’s time for new rules
by John McCollouch
The Telecommunications Act of 1996 was intended to promote real competition and investment in the communications industry. With that competition and new investment was to come thousands of new jobs.
Do you remember our world as consumers before the Telecommunications Act of 1996? It was largely one company, one service, one choice. There were no nationwide calling plans with unlimited weekend and evening minutes. No high-speed broadband...no Blackberries...no cable company calling up offering telephone service. It was a different world, which warranted different rules. As a result, Congress passed a law suited to a monopoly environment, one that sanctioned a heavily government-managed telecommunications marketplace.
Today, we live in an entirely new world when it comes to how we communicate. More than 8 million Americans have “cut the cord,” becoming wireless-only households. It doesn’t take a policy expert to prove that an innovative new communications marketplace has emerged-one that is defined by competition among cable, satellite, wireless, and traditional telephone companies, along with a growing array of consumer choices.
In the past three years, over 600,000 communications jobs have been lost in our country, and more than $2 trillion in communications industry market capitalization has evaporated. What happened?
At issue are the Federal Communications Commission (FCC) rules requiring BellSouth and other regional telephone companies to lease their networks to competitors at deep, below-cost discounts. These rules expired on June 15, and before the end of this year, the FCC is expected to craft new rules.
This is good news for all consumers, including those in the Mississippi Delta. Momentum is building for reforms that unleash the power of real competition in the telecommunications sector. True competition with the benefits of technological innovation should proceed.
BellSouth does not object to competitors leasing our network switches. In fact, given competition from cable, wireless, satellite, e-mail, and instant messaging, we have every incentive to negotiate deals for competitors to use our network.
However, under the old rules, there was little incentive for the regional Bells to upgrade our networks, much less build new ones.
We simply ask that competitors lease our network switches at commercially-viable rates. That is why we recently offered to negotiate stable wholesale agreements with our competitors, several of which accepted the offer.
A new approach suggested recently by FCC Chairman Michael Powell provides a solution to end the seemingly endless litigation and uncertainty that has crippled the communications industry. In recent remarks to the National Association of Regulatory Commissioners General Assembly, Chairman Powell said, “We are well-advised to pursue regulatory policies that invite, nurture and promote innovative activity in the digital age, or we stand to lose out on its rewards.”
We need pro-competition policies that encourage companies to negotiate market-based agreements and prices. As an industry, this gets us closer to a free-market that will foster true competition. Only true market-based competition can provide consumers with increased choice, greater value and increased innovation. We trust that the FCC will consider this as they spend the next few months writing new telecommunications rules. DBJ
(John M. McCullouch is President-Mississippi Operations for BellSouth.)
