Speaking for Nevada - December 2005

Reform of Telecom Laws

Needed to Boost Economic Growth

by John Ensign

"How will the Broadband Investment and Consumer Choice Act impact local municipalities and consumers in Nevada?"

When the Telecommunications Act of 1996 was passed, few imagined the explosion in wireless and broadband technologies that has since revolutionized the communications industry. In 1996, very few of us could imagine the idea of making phone calls over cable or the Internet or foregoing landlines altogether for wireless phones.

The 1996 act was the first rewrite of telecom law in 60 years, yet more has changed since 1996 than in the previous six decades. As outdated as it is, this is the law that currently governs telecom in our country. Changes are needed, and consumers deserve it.

With the help and encouragement of my colleagues in the U.S. Senate, I have introduced the Broadband Investment and Consumer Choice Act, which will update our telecom laws and make America more competitive in the face of global competition.

According to some rankings, our country has slipped to as low as 16th in the world in deploying broadband. The country most responsible for taking the Internet out of the labs and putting it into homes, offices and schools is embarrassingly slow to keep up with the latest technologies. Broadband and other new technologies are our future, yet we still regulate telecom based on the past. Policy must reflect new marketplace realities. That is my goal for this legislation.

We need to put an end to the type of counterproductive telecom policy that hurts investment and innovation. We also should welcome new technology with open arms –not wave old rules at it. I believe these sensible goals can be accomplished while still retaining important consumer-protection standards.

I am both optimistic and excited about the prospects for reforming telecom policy. Take the video segment, for example: New competitors want to enter this market to battle cable companies for our business, and we have the opportunity to shape rules to encourage that. My bill would make it clear that phone companies – or other new competitors in the video space – would not need to spend needless months, if not years, negotiating franchise agreements in 33,000 different jurisdictions that were established in an era of monopolistic cable companies. At the same time, cities would still control rights-of-way and receive fees from providers based on company revenues.

This only makes sense. Cable companies have aggressively entered the phone market using new Internet-based technologies. And they’ve done so unencumbered. Phone companies should be allowed to enter the TV market using similar new Internet technologies. The result would be better choice and more competitive prices for consumers. My legislation would clarify regulations and allow video competition across the country. These same updated rules would apply to all video providers, thus allowing carriers to compete against each other on a level playing field, and let consumers, not government bureaucrats, choose the winners and losers.

Nobody likes to lose the power that comes with being able to regulate an important industry. So, it should come as no surprise that some local governments and their cable franchise authorities – created when there was usually only one video provider – are not excited about losing some of their power to a new modernized set of consumer protections.

There is good news, however, for local government. The real benefit to local governments will come from the economic growth that follows broadband adoption. For example, 700,000 Americans now rely on e-Bay-based businesses for their primary income. These are new jobs for Americans as we transition from a manufacturing-based economy to the information age.

A recent study concluded that modernizing our telecom laws would result in 1.2 million new jobs and $113 billion in new tax revenues, but I think the actual amounts will be much higher. Consider the educational opportunities for our children – and job retraining and lifelong learning that can occur for adults – all made possible by broadband. These are sustainable revenues from which state and local governments will benefit over the long term.

It is time to update our communications laws so consumers more fully benefit from exciting new technology, today’s competition and tomorrow’s possibilities.