100 Years Later, Time for New Policies to Match the New Marketplace in the New Year

12.26.2013

It was a century ago this month that the “old” AT&T avoided a threatened government take-over of its voice network by entering into an agreement known as the Kingsbury Commitment.  The early 20th Century AT&T received what amounted to a government-sanctioned voice monopoly --  enabling the company to pursue the “one policy, one system, universal service” approach that both it and the government believed at the time would be best for customers –  in exchange for agreeing to pervasive economic regulation.  
 
How times have changed!  Today the notion of a single voice provider is quaint, at best.  Consumers can choose voice service from a wide variety of competitors – wireline, wireless, cable, and over-the-top VoIP.  Consumers have long abandoned the thought that they are limited to one provider – or even one technology – for voice communications, rendering completely obsolete the idea that legacy telephone companies enjoy government sanctioned monopolies. Yet, despite the passing of the “one system” era, much of the economic regulation remains – disproportionately imposed on wireline companies.  The quid pro quo of the Kingsbury Commitment – the grant of a protected monopoly in exchange for regulation – has sunset. It is time for early 20th Century policies to do so, as well.

As we approach the new year, we applaud the new Chairman of the FCC, Tom Wheeler, for recognizing the need for new thinking, for his commitment to competition and consumer choice, and for his focus on technology transitions.  We also applaud House Energy & Commerce Chairman Fred Upton, Telecommunications Subcommittee Chairman Greg Walden, and Ranking Members Henry Waxman and Anna Eshoo for beginning a new, bipartisan process aimed at updating our nation’s telecommunications laws.  It has been almost two decades since Congress last updated telecom policy – at that time establishing the twin goals of promoting competition and reducing regulation.  In the intervening years, there has been vibrant growth in competition, but there remains much to be done with regard to reducing regulation – eliminating antiquated rules that impose unnecessary costs, stifle investment in IP infrastructure, and slow the introduction of new services.  After 100 years, it’s time to leave the wireline-centric regulation of the monopoly voice era behind, focus on the broader social compact between network operators and their customers, and embrace our nation’s highly competitive, consumer driven, Internet-enabled future.
 

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