When will they ever learn?

Mar 1, 2002 12:00 PM, Peter Bernstein

The song "Where Have All The Flowers Gone?," part of our cultural DNA, was written by legendary folk singer Pete Seeger in 1956 after he and seven others (including playwright Arthur Miller) were cited for contempt of Congress during the darkest days of the national witch hunt for communists in the entertainment industry. The year is also important because the 1956 Consent Decree against AT&T, which forbade the company from going into the computer business, went into effect. What the two items have in common is the refrain from Mr. Seeger's song, "When will they ever learn? When will they ever learn?" 

Since 1956, the history of public policy (congressional, state, local and FCC) and judicial intrusion into the IT services industries has been to search for the holy grail of establishing a line between "basic communications services" provided by regulated/franchised entities, and "information services" offered by the regulated entities in competition with others but subjected to "looser" rules. We've lived through a raft of activities. The FCC's Computer Inquiry I and II, and the Incumbent Protection Act of 1996 (a.k.a., The Telecommunications Act of 1996), are just a few choice examples.  These were well-intentioned, if totally misguided, attempts to draw lines in the sand. They were done while their promulgators were constantly in denial that the next wave always washes away the lines, unless you are lucky enough to be beyond the reach of the 100-year flood. And even then, the winds of time rather than the ravages of the water make line-drawing an ephemeral and ultimately futile undertaking.

What one would have thought in the nearly 50 intervening years is that those responsible for making and enforcing the rules might have learned something. What that "something" should have been is that drawing lines in the sand for the IT industries does nothing except create policy jet lag at best. What it has usually created is an annuity revenue stream for industry lawyers and lobbyists, and a steady stream of political contributions with little public benefit.

Political comedian Mark Russell once observed that Washington, D.C., is eight square miles of real estate astride the Potomac River that is surrounded by reality. There is no better way to explain the looming passage of the Tauzin-Dingell bill (which some competitors have labeled "The ILEC Relief Act of 2002"), and the FCC's notice of proposed rulemaking (NPRM) on classifying ILEC wireline-based broadband offerings as information services instead of common carrier ones--making them not subject to equal access and interconnection rules. Surreal is the only way to describe the total lack of understanding of the history, economics and structure of the communications industry that is being overlooked for the sake of whom? You? Me? The ratepayers of the ILECs? The shareholders of their suppliers?

Indeed, the only explanation is that we live in tough times and that the lawyers, lobbyists and politicians are not happy about the prospects of the annuity revenue drying up. Why not put out an NPRM that could take years to process (including challenges, remands, etc.)? Why not pass a horrible bill in the House during an election year just to shake the trees? This is a license to ask for donations. It is also a political freebie. Everyone knows no member of Congress will lose their seat in either house based on how they feel about communications legislation. The prospects of Tauzin-Dingell getting through the Senate are about as good me winning the New Jersey Lottery this week. FYI, I did not purchase a ticket.

The Congressional stuff is just the usual political silliness. It has been going on since the Consumer Communications Reform Act of 1975 (a.k.a., "The Bell Bill") was introduced and defeated. There seems to be a compunction every 20 years or so to give the impression of reforming something. Hence, the 1996 Act. On the other hand, the FCC proceeding is serious. Actually, that should read, "seriously flawed."

We live in a world where a bit is a bit and a byte is a byte. They don't care who carries them or where. What the people who create them hope is that they are moved and managed according to policies and rules that protect the sanctity of the information and its senders, and that they are done so according to the preferences of senders and receivers. They also would like choice in vendors.

We live in a world in which Microsoft's SIP client in XP has it poised to become the dominant interactive multimedia supplier. SIP makes voice over cable to a feature server a reasonable alternative to the entire anachronistic common carrier regime, and the ultimate in bypass. We live in a world where 802.11 wireless technology could mean that mobility wireless networks will never get a return on their investment. Yet, the FCC is interested in keeping a hopelessly antiquated bifurcated—cable/common carrier and federal/state--regulatory regime in place to please incumbents in the face of the technologic genie having long been out of the bottle. This would not be just bad policy. It would be an act of irrational exuberance. We don't need more of that.

It is bad enough that Congress and the FCC want to tilt the stakes for determining the winners of controlling the broadband destiny of this country in favor of the companies that have failed to give us inexpensive and universal broadband so far--companies that have spent billions overseas helping other nations develop broadband networks, but that complain about being forced to put ratepayer money in the ground here. However, you can't fault the incumbents for using their leverage. That is what their management gets paid to do. What is worse is that our policymakers choose to do so in piecemeal fashion rather than give us the national universal broadband policy we need--a reality that virtually all the industrialized nations we compete against already have. "When will they ever learn?"

As the singer/song writer/poet laureate of our time, Bob Dylan, has intoned, "The answer my friend is blowing in the wind. The answer is blowing in the wind."

Peter Bernstein is President of Infonautics Consulting, Inc. He can be reached at pabernstein@worldnet.att.net.