NCPA - National Center for Policy Analysis

Congress Must Revisit Telecom Policy

September 22, 1999

Swift advances in telecommunications technology are about to give Congress new headaches, experts agree.

"In 1996, Congress thought it had washed its hands of telecom policy for a long time," says the Heritage Foundation's Adam Thierer. "Now it's going to be forced to deal with it again. And there are very real repercussions for business."

Analysts say Congress -- as well as state and local legislators -- will be faced with two questions:

  • Should broadband services over phone lines be separate from the local and long-distance offerings of regional Bell companies?
  • And should cable companies' broadband connections be opened to competition in the same way the Telecom Act opened local phone companies to competition in 1996?

Experts say that development of broadband service outside the cable industry has been slow. Thierer even detects signs of "some disinvestment in this area."

Local phone and cable companies say that because the Telecom Act requires them to share their networks with competitors, they can't make enough money to justify upgrading their systems for widespread broadband access offerings.

Regional Bells want to ship data long distances at high speeds. And they want to do so without sharing access to those new lines. But that runs afoul of the Telecom Act, which doesn't let Baby Bells enter the long-distance market until they open their local services to competitors.

With the overall Internet access market expected to reach $35 billion by 2002 -- up from $14 billion today -- the stakes are high.

Source: Joseph Guinto, "Will Congress Open the Pipes?" Investor's Business Daily, September 22, 1999.


Browse more articles on Government Issues