A bold telecom proposal

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Sen. John Ensign wants to revamp aging regulations on telecommunications and information industries in a bill he recently introduced. If passed, the bill would have a far-reaching impact on voice, video and data technologies, as well as the deployment of broadband, or high-speed, Internet. Some aspects of the bill have already been addressed by rule changes at the Federal Communications Commission (FCC), but those rules are frequently challenged in court. Mr. Ensign's bill, called the Broadband Investment and Consumer Choice Act, would enshrine deregulation into law, allowing for regulatory roadblocks to come down faster.

The prospects for the bill's passage hinge on Congress' willingness to make sweeping changes in the regulatory landscape for telecommunications. While lawmakers should carefully consider all aspects of the bill, they should not be daunted by its breadth. Telecommunications regulations established under the Telecom Act of 1996 have long since become archaic by technological innovation. Although cable operators are required to comply with much less-stringent regulations than telephone companies, the two industries now offer many of the same services.

The Ensign bill is geared toward broadening consumer choice by giving telecommunications and IT industries greater ability to compete with each other. The bill would eliminate local regulations in a number of areas, creating uniform federal rules, including federal consumer protection standards. State and local authorities would still enforce the federal regulations and manage rights of way, deciding when and if, for example, a company would be allowed to dig up a street to lay down cable.

Under the bill, companies would no longer have to apply with local authorities for a franchise to offer video services, a costly and time-consuming exercise. The bill would therefore allow telephone companies to start offering video services to homes on a broad scale through their phone lines and compete with cable television companies. There are about 30,000 franchise authorities nationwide, and it takes a company about six to nine months to obtain a franchise agreement. The bill would also relax the dizzying local regulations on wireless telephone companies, requiring them to comply only with federal requirements.

The bill would also lift regulatory impediments on companies to offer all the services they are technologically able to deploy. It would, for example, allow cable companies to offer Internet-based phone service, known as voice-over-Internet-provider, or VoIP. It would also make illegal any attempt by a broadband provider to block a consumers' use of an Internet-based phone service. In addition, the bill would make illegal any move by an Internet-service provider to limit users' ability to freely access Web sites.

Elements of the bill would level the playing field for different industries. The four big local telephone companies, the so-called Baby Bells, by 2011 would no longer be required to lease out their copper networks to competitors at publicly set and below-market rates. The bill would also give phone companies an incentive to bolster broadband deployment by eliminating forced access to their fiber wires. That would create for telephone companies regulatory parity with cable companies, which under a recent Supreme Court decision, are not required to lease out their networks.

In effect, Mr. Ensign has recognized in his bill that, thanks to technological advancements, there are no longer definable market distinctions between cable, wireless and telephone companies, and that they should be allowed to competitively use the networks that they own against each other. The bill could stimulate growth in broadband and other services, and open the way for innovation. When Congress returns, it should weigh the bill's potential impact on pricing and consumer access to existing and emerging technology.