Happy Anniversary, ’96 Telecom Act

Today, Americans should take a break from our daily digital immersion to celebrate the enactment of Telecommunications Act of 1996. With its twin pillars of competition and deregulation, this groundbreaking law set the stage for the thriving broadband Internet economy we take for granted today. The Act accelerated massive investment and innovation in communications and information technology propelling widespread adoption of powerful and connected technologies leading to unforeseen economic prosperity and consumer choice. We’ve come a long way in a very short time.

Twenty years ago, nearly every home in America had landline voice service from a local telephone monopoly and paid third-party long distance providers by the minute. Most viewed television from the local cable monopoly or over the air.  Wireless communications, satellite television, and the Internet were in the very early stages of their development. Fax machines, Palm Pilots, and clunky desktop computers with dial-up Internet were cutting edge. Practically no one had broadband Internet, certainly not of the speed and quality available today.

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The Telecom Act transformed the communications industry from a group of isolated monopolies to a highly competitive, diverse, and innovative marketplace. It broke up local voice and cable monopolies and allowed competition across traditional industry boundaries, which set in motion the race to build the broadband Internet. New wireless and Internet markets became competitive from the outset. As a result of policies encouraging broadband network competition in a minimally regulated environment, the investment spigot opened up. Since 1996, broadband providers have invested $1.5 trillion building competitive landline and wireless networks across the nation and continue to invest more than $70 billion annually.

The benefits of broadband competition and investment unleashed by the Telecom Act have been astounding. In 20 years, Internet traffic has grown by a factor of more than 135,000; we invest more per capita than other industrialized nations; and we generate more traffic than all counties except South Korea. With access to broadband, mobile, and WiFi networks, U.S. consumers, businesses, and governments are well along the transition to modern, more efficient Internet and mobile networks. Today our industry continues to invest in better and faster networks while we build the cloud computing and content distribution infrastructure so essential to the evolving broadband and mobile Internet. And we are laying the foundation for emerging applications, such as data analytics, the industrial Internet, and the Internet of things. 

Consumers are the greatest beneficiaries of these evolutionary changes. Almost all Americans can get either wired or wireless Internet access. Approximately 90 percent of Americans have a choice among two or more landline providers and four or more wireless broadband providers. Public and home WiFi networks are widely available. Nearly 300 million Americans in 90 percent of American households have a wireless phone, with a majority using a broadband-enabled smartphone. Only half of households have a landline phone at all.  Long-distance charges are a thing of the past as consumers purchase all distance voice service, usually in a bundle with broadband Internet access. Subscription video services are available from telecom broadband providers, satellite companies, and cable. Meanwhile tens of millions of American households are getting video through new online Internet video services.

Consider the difference twenty years has made in consumer services, convenience, and choice in industries such as music, photography, books, print and broadcast media, voice communication, video entertainment, advertising, retail, real estate, travel, hospitality, and consumer finance. Other industries are also being transformed, such as energy, manufacturing, and even agriculture. Meanwhile, we have thriving industries that either did not exist or barely existed 20 years ago, such as search, social media, location services, online markets, and the sharing economy; and there is a transformation taking place in health, education, and public services.

While the Telecom Act was ahead of its time in the 1990s, 20 years later it is time for a refresh. Having achieved its core market-opening goals and achieved a fast-paced, dynamic broadband economy, much of the Act is now obsolete. In a world where competition is occurring across traditional industry boundaries, where computing and communications have converged, the Telecom Act’s categories make no sense.  At the same time, new challenges are arising around privacy, intellectual property, cybersecurity, and completing the deployment of broadband to all parts of the United States.  Congress, as the elected representatives of the American people, must ensure that telecom policy addresses today’s challenges, not last century’s, and ensures that we retain our international leadership.

McCormick is president and CEO of the United States Telecom Association.

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