Rick Boucher: The future of telecommunications
OPINION l In today’s hyperpartisan environment, it’s useful to remember that not so long ago, Congress normally worked in a bipartisan manner to achieve matters of great national purpose. Saturday marks the 18th anniversary of one such notable achievement, the Telecommunications Act of 1996.
The ’96 Act was a watershed development in communications policy. It opened the door for cross-platform competition across a range of telecommunications sectors, expanding consumer choices and stimulating network investment. Telephone companies were empowered to offer multi-channel television service. Cable companies and other new entrants were empowered to provide competitive local telephone service. The Regional Bell Operating Companies were provided a path to enter the nationwide long-distance market upon demonstrating they had sufficiently opened their networks to local telephone competition, and they were given permission to manufacture telecommunications equipment.
The ’96 Act cleared away the regulatory underbrush that prohibited the cross-platform competition now made possible through technological advances. It ushered in an era of service convergence. Consumers benefited from the highly competitive market and were given one-stop shops for all their voice, video and data needs. Together with Congress’s wise decision in 1993 to adopt a light-touch regulatory approach to the then-emerging wireless industry and the contemporaneous decision of the Federal Communications Commission to forbear from applying common carrier regulations to broadband networks, the ’96 Act has undergirded the progress we have seen over the last two decades.
The rapid technological and marketplace changes advanced by the ’96 Act have outpaced our existing regulatory regime and brought us to a new policy inflection point. Technology and consumer access to information have changed so rapidly since 1996 that the debates we had in those days now seem quaint, and the communications opportunities available to consumers in 2014 would have been unrecognizable 18 years ago.
The dramatic shift toward broadband-based networks forecasts nothing less than the end of the aging telephone network first used in the era of Alexander Graham Bell. By the end of this decade, through a carefully planned process, all consumers will have transitioned to modern high-speed broadband networks.
Most consumers — essentially anyone who has a cellphone or who gets telephone service from a cable provider — have already made this switch without government action. Drawn in significant part by 4G wireless technology offering speeds comparable to the fastest wired broadband, consumers are fleeing the old network in droves. Today, less than one-third of the country uses it at all, and only 5 percent use it exclusively. It’s rapidly wearing out. Manufacturers don’t make new equipment for it, and the costs of maintaining it are skyrocketing. It’s a network with limited service functionality. As the transition to date underscores, consumers realize how broadband-based networks offer them far more. Driven by new technological opportunities, that’s the marketplace at work.
But as a result of current regulatory requirements, telephone companies collectively spend more maintaining the outdated network than investing in modern broadband networks. As the number of subscribers on the old network dramatically declines, these expenditures are simply unsustainable. Moreover, every dollar expended maintaining an outdated network is a dollar not available for investment in the modern, highly functional networks consumers prefer.
These realities in 2012 led the FCC’s Technological Advisory Council to recommend that the old, public switched telephone network sunset by 2018. At the time, the Advisory Council was chaired by Tom Wheeler, now FCC chairman. In his first months in office, he has embarked on a thoughtful process to achieve a complete national transition by decade’s end.
Modeled on the successful demonstration trial the FCC established in the run-up to the digital television transition, the agency this year will conduct several demonstration projects in carefully selected markets, through which consumers will rapidly be transitioned from the old network to modern multimedia platforms. With the information gained from these trials, the FCC can fashion a plan to sunset the switched network by a date certain.
Completing the transition will require answering some challenging questions, such as how to protect the core consumer values of universal connectivity, access to public safety and disability services and competition. Equally important: How do we maintain today’s vibrant environment for broadband investment?
Thanks to our light-touch regulatory regime, the U.S. already receives three-quarters of worldwide investment in broadband networks. These expenditures will be dramatically accelerated, with billions more invested, once the local exchange carriers are freed from the need to maintain outdated, less popular and highly expensive old networks, even as they invest in modern ones.
To meet these challenges, the full participation of all stakeholders, including government, consumers and network operators, will be essential.
The ’96 Act accomplished everything we intended. It unleashed a golden era of competition, service improvements, technological advancements and massive investments in high-speed broadband-capable networks. With the right public policies in place — policies favoring investments and newer technologies consumers want — this golden age will continue for all Americans.
The transition to IP networks, and the policy modernization that will accompany it, represent the largest telecom changes since the ’96 Act. It’s going to be an exciting several years.
Boucher represented Virginia’s 9th Congressional District from 1983 to 2011. He was a participant in the construction of the Telecommunications Act of 1996. Today he is honorary chairman of the Internet Innovation Alliance and heads the government strategies practice at the law firm Sidley Austin, which represents communications companies among other clients.
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