Telecom Deregulation Only Possible in States With Effective Competition, Say Panelists
Deregulating the telecom industry can work for some states if the market remains competitive for the consumer, but residential and business services are inherently different in terms of regulations, said panelists at a National Regulatory Research Institute teleseminar Wednesday. About 27 states have deregulated their wireline, wireless, VoIP or cable services in some way, but regulations still exist for rural areas where competition is limited, said NRRI Principal Sherry Lichtenberg. However, these states have all deregulated in different manners, from legislation through state legislatures to state regulatory agency proceedings, she said.
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Wholesale and retail markets are evaluated differently, said Karen Reidy, Comptel vice president-regulatory affairs. “Products that serve demand in the residential setting may not be available for businesses.” More information needs to be readily available to track the availability of wholesale and retail services, said Regina Costa, National Association of State Utility Consumer Advocates telecom committee chairwoman. Most of the information reported to the FCC comes from carriers, so it’s not an accurate representation of service availability, said Costa. In Costa’s home state of New Jersey, The Utility Reform Network, where she works, collects information on service provider prices, and she urged other states to do the same through their regulatory commissions. “States need this information to choose whether they have a competitive service in order to act on regulations,” said Costa. “In a wholesale market, there can be even less competitive options."
Florida is among the states that do collect data on services to provide a clear look at the availability and adoption of Internet service, said Ronald Brise, Florida Public Service Commission chairman. “States need to collect information to make adequate decisions about policy.” Ultimately, Florida’s competition leads to a market where prices are lower and providers are competing to get customers, said Brise. Residential customers are switching from wireline to wireless and VoIP, but businesses still need to get wireline service, said Brise. The state’s topography allows “different types of communication” to become effective competitors there, he said.
Federal and state subsidies also need to be considered when deciding to deregulate for incumbent carriers, said Rick Cimerman, NCTA vice president. “We need to take a hard look at whether incumbent providers can get these benefits if there is significant competition in the state.” Carrier of last resort obligations hold a “mythic” status that is a “little overblown,” said Cimerman. “Rural carriers use COLR obligations as a reason to receive subsidies, and this should not be the case,” he said. “These obligations are not as stringent as they are made out to be, and providers should be required to roll out service to anyone who needs it.” Rights of way can also serve as impediments to businesses getting broadband access, said Cimerman. “More regulations are not needed, but providers must work together to provide them access."
Internet protocol services still need a wireline backbone to function, said Reidy. “IP does not allow you to bypass the bottleneck of services,” she said. “Enduring competition is necessary for consumers when prices go up and services goes down, to have a choice.” An intermodal model is necessary to ensure this sustainability in the market, said Reidy. (sfriedman@warren-news.com)