Telecom Reform: Here Come the States

Those of you on the MI-Telecom list can pretty much skip this commentary (it's a condensed version of my earlier commentary in the previous message) and scroll right down to the excerpt. For those of you on the VoIP News list, here's a little preliminary commentary:

I am passing along this item not because I agree with it -- for the most part, I do NOT -- but because for some reason the libertarian think tanks seem to have more influence with legislators than they should. Since there are no libertarian legislators elected by the people (in most states), one wonders why libertarian think tanks are even paid any attention. Further, I wish someone with the investigative skills would follow the money trail on these organizations -- they have to get their funding from somewhere, and I'm very suspicious that some of their funding may be coming from Some Big Company in Texas.

But more to the point, these people are lobbying for deregulation of the telephone industry. It seems to me that competition is a good thing, and deregulation is a bad thing when one company (the ILEC) still has effective bottleneck control over an industry. What I see happening here may be nothing less than a sneaky way to re-establish the Bell monopoly.

The attack is as follows: Paint VoIP as a formidable competitor. Get state legislators to agree that VoIP offers significant and ubiquitous competition, even though less than 1% of the public uses VoIP and VoIP currently has significant shortcomings (such as lack of "enhanced"

911). Then when the phone companies are deregulated, they will put the screws to VoIP, by first refusing to sell broadband connectivity (DSL) unless the customer also buys dial tone, and should the customer agree to that, they will then play games with packet routing and traffic shaping to degrade the service of VoIP companies.

Well, except of course for their own deregulated VoIP offerings, which (unless the customer subscribes to a "premium" service at a very high price) will look a lot more like traditional phone service (limited calling areas and per-minute billing). That traffic will ride the expressway, while competitors' VoIP traffic may be relegated to the gravel roads, so to speak. And without regulation, they will be able to raise rates at will.

End of my commentary, here's an excerpt of the article that inspired it (note the date -- one could hope this is just an April Fool's joke, but I suspect it is deadly serious).

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Telecom Reform: Here Come the States Alabama leads the way Written By: Steven Titch Published In: IT&T News Publication Date: April 1, 2005 Publisher: The Heartland Institute

In February, Alabama became the latest state to place telecom reform on its legislative agenda.

Senate Bill 114 and its House counterpart, House Bill 112, call for deregulation of wireline dial-tone services. The law would still allow the Alabama Public Service Commission (PSC) to field complaints and adjudicate disputes between consumers and local phone companies, but the PSC would no longer set rates or dictate the way companies bundle their services. Similar reform bills are on the docket, or headed for it, in Illinois, Indiana, Texas, Wisconsin, and other states.

The Alabama bill recognizes the reality of intermodal competition from wireless and voice over Internet Protocol (VoIP) services. It affirms that telecommunications is becoming increasingly competitive as service platforms shift away from proprietary, closed narrowband networks to broadband connections based on open standards that support diverse, customizable multimedia services.

Telecom reform advocates recognize that telephone service offered on broadband platforms simply cannot be regulated as it was in the past. Reform is necessary. The only question is what form it should take. Many opponents of reform refuse to acknowledge that the current scheme, even as it keeps rates low for some, is unsustainable.

Full story at:

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Jack Decker
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