The Old Rules Just Don't Fit Anymore:


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The Old Rules Just Don't Fit Anymore:

  1. 1. The Old Rules Just Don’t Fit Anymore: A Panel Discussion on the Proposed Revision of the Telecommunications Act of 1996 <ul><li>John Windhausen, Jr., Past President, Association for Local Telecommunications Services </li></ul><ul><li>Randolph J. May, Senior Fellow and Director of Communications Policy Studies, The Progress & Freedom Foundation </li></ul><ul><li>Richard S. Whitt, Vice President, Federal Law and Policy, MCI, Inc. </li></ul>
  2. 2. The Communications Act: Past, Present and Future? A Presentation to Educause April 6, 2005 <ul><li>John Windhausen, Jr. </li></ul><ul><li>President </li></ul><ul><li>Telepoly </li></ul><ul><li>(202) 558-6164 </li></ul><ul><li>[email_address] </li></ul><ul><li> </li></ul>
  3. 3. The Radio Act of 1927 <ul><ul><li>Established rules to prevent interference among radio broadcasters </li></ul></ul><ul><ul><li>Federal Radio Commission operated under Interstate Commerce Commission </li></ul></ul><ul><ul><li>Meanwhile, AT&T increasingly acting like a monopoly over telephone service; DOJ threatening additional antitrust scrutiny </li></ul></ul>
  4. 4. The Communications Act of 1934 <ul><li>Title I: Creation of the FCC </li></ul><ul><li>Title II: Common Carrier Provisions to regulate AT&T </li></ul><ul><li>Title III: Radio Provisions to Govern Broadcast Industry </li></ul><ul><li>Title IV: Legal, Administrative </li></ul><ul><li>Title V: Penalties </li></ul><ul><li>Title VI: Repealed 1927 Act </li></ul>
  5. 5. Services, Technologies, Entities were all clearly separate. <ul><li>Telephone Services were provided by AT&T (and independent, non-competing rural telcos) using copper wires to allow two-way communications </li></ul><ul><li>Radio (and later TV) broadcasters used the radiofrequency spectrum to provide one-way information </li></ul>
  6. 6. Long Before VOIP, New Services Created Tensions – Satellite, Wireless Telephony <ul><li>Both Cellular companies and Satellites had to receive spectrum licenses under Title III. </li></ul><ul><li>Cellular provides two-way services like a common carrier, therefore Title II applies as well. </li></ul><ul><li>Satellites can provide either one-way (broadcast-like) or two-way (common carrier-like) services </li></ul>
  7. 7. Cable Communications Policy Act of 1984 <ul><li>Cable companies were a different entity (neither telcos nor broadcasters) </li></ul><ul><li>Cable Companies used their own technologies (coaxial cable) </li></ul><ul><li>Cable companies provided a different service (they did not generate content like a broadcaster, but did not engage in two-way communication like a telco) </li></ul><ul><li>So, Congress inserted new Title VI to regulate cable television service. </li></ul><ul><li>Previous Title VI moved to become Title VII. </li></ul>
  8. 8. The “Silos” <ul><li>Title II: Telecom </li></ul><ul><li>Title III: Broadcast </li></ul><ul><li>Title VI: Cable </li></ul>
  9. 9. The “Layers”: <ul><li>AT&T started to provide data processing service in the 1970’s in competition with IBM. </li></ul><ul><li>The FCC’s Computer Inquiry Rules distinguish between “transmission” (basic services) and “content” (enhanced or information services). </li></ul>
  10. 10. The Telecom Act of 1996: Breaking down the “Berlin Wall of Telecommunications. “ <ul><li>Opened the local telephone market to competition from long distance companies, cable companies, electric utilities (Municipalities?) </li></ul><ul><li>Allowed the RBOCs into long distance and manufacturing. </li></ul><ul><li>Gave the FCC greater regulatory flexibility to regulate different firms in different ways depending on their market position. </li></ul>
  11. 11. Since then . . . . <ul><li>Cable and ISPs are providing VOIP – telephone service over the Internet – competing with Telcos under different rules. </li></ul><ul><li>Municipalities are constructing their own broadband networks in competition with the private sector </li></ul><ul><li>Unlicensed users of the spectrum are becoming widespread (Wi-Fi and Wi-Max) </li></ul>
  12. 12. What Regulatory Structure Should Apply to the 21 st Century? <ul><li>Alternative #1: Based on technology? (I.e. fiber optic cables, IP-based) </li></ul><ul><li>Advantages: deregulating broadband technologies may promote deployment; providing greater certainty. </li></ul><ul><li>Disadvantages: Difficult for regulators to differentiate lines between technologies; consumer impact may be discriminatory </li></ul>
  13. 13. What Regulatory Structure Should Apply to the 21 st Century? <ul><li>Alternative #2: Based on the type of Entity (I.e. all telcos, all cable companies, etc.) </li></ul><ul><li>Advantages: Provides parity of regulation; level playing field </li></ul><ul><li>Disadvantages: One company may provide several services – are all of them regulated? What if companies have different market power? (incumbents vs. new entrants) </li></ul>
  14. 14. What Regulatory Structure Should Apply to the 21 st Century? <ul><li>Alternative #3: Based on the Service Provided (I.e. landline telephone service, cable service, wireless telephone service, TV, etc.) </li></ul><ul><li>Advantages: can provide parity; easiest for consumers to understand </li></ul><ul><li>Disadvantages: Service boundaries are increasingly blurred (IPTV, wireless and wireline). </li></ul>
  15. 15. What Regulatory Structure Should Apply to the 21 st Century? <ul><li>Alternative #4: No regulation </li></ul><ul><li>Advantages: Eliminates regulatory uncertainty, may promote investment, antitrust law can prevent monopolization </li></ul><ul><li>Disadvantages: May lead to higher consumer rates if no competition; antitrust enforcement difficult </li></ul>
  16. 16. How Will the Re-Write of the Telecommunications Act Affect Education Technology? <ul><li>Will a new Act provide greater certainty, promote technological innovation, give educational institutions a greater choice of providers? </li></ul><ul><li>OR </li></ul><ul><li>Will a new Telecom Act yield a new round of interpretation, litigation and confusion for telecom technology consumers? </li></ul>
  17. 17. Next Steps <ul><li>Summarize any actions required of your audience </li></ul><ul><li>Summarize any follow up action items required of you </li></ul>