Technologies and markets are moving quickly, Annenberg Senior Fellow Henry Geller said, but policy thus far has lagged. Except regarding wireless technologies, our communications law has not evolved much from its roots in the railroad era.
Keith Bissell, commissioner of the Tennessee Public Service Commission and first vice president of NARUC, stated that the traditional regulatory contract protected utilities from competition and guaranteed a rate of return; that approach is no longer tenable. Instead, Bissell called for "managed deregulation." Regulators should eliminate barriers to competition for all players at about the same time. For local exchange companies, regulators should open the networks to full interconnection and competitive access, move to cost-based pricing, spread the financial burden for universal service over all competitors, and remove regulatory and legal restraints that impede competitive ability. State regulators, who are most familiar with conditions in their states, should lead the way in regulatory reform.
Bissell warned that merely providing two wires to every home will not be enough to guarantee competition and the widespread development of the NII. Instead, affordability of services must be the primary motivation of subsequent regulation.
Michele C. Farquhar, director of the Office of Policy Coordination and Management and chief of staff of the National Telecommunications and Information Administration (NTIA), focused on three hurdles to quick information flow and their possible solutions. First is the asymmetric regulation of telecommunications and related industries; the Administration is preparing legislation to reduce these inconsistencies. Second, NII development requires demand for its services; the Administration's matching grants program is designed to encourage applications in education, health care, job training, and other social services. Finally, Farquhar said, government is widely perceived as part of the problem; the Administration hopes to establish a partnership with the private sector that will accelerate NII development.
Thomas A. Kalil, director of science and technology for the White House National Economic Council, suggested a way to determine to what extent communications and computing are converging. In computing, price and performance improvements of 25 to 30 percent a year are routine. When telecommunications charts similar annual improvements, he said, genuine convergence will be occurring. He suggested that setting standards that will lead to greater interoperability is the best way to ensure these kinds of improvements.
David C. Leach, the senior professional staff member on the House Energy and Commerce Committee, stated that he felt like the guardian of the status quo. When people disagree on where we should be going, Leach said, asking government to draw the road map is dangerous. This danger is greater given Congress's predilection for using statutes to impose narrow regulations, which become difficult to change. The 1934 Communications Act is not perfect, but Congress has updated it several times; it is far from obsolete. He noted, though, that the Modified Final Judgment is no longer adequate.
Bruce W. McConnell, chief of information policy for the Office of Information and Regulatory Affairs, Office of Management and Budget, noted that the government is the nation's largest producer, collector, and user of information--much of it useful to others. The Administration is seeking ways to ease access to this information, while considering safeguards to protect intellectual property rights, privacy, and network security.
John Windhausen, counsel to the Communications Subcommittee of the Senate Committee on Commerce, Science, and Transportation, said that many senators approach these issues in the context of the successful telephone system, which was developed under a regulatory construct that promoted local monopolies and guaranteed universal service. The new approach must balance the old monopoly model with the new forces of technology.
Congress, he said, is still mulling over how to let telcos enter the cable business. The two industries should compete under similar rules, either the Cable Act or common-carrier obligations. Other reforms are unlikely to pass until the public agrees on what should be done.