Hearing generates ideas for Telecom Act rewrite

Most attention focused on the U.S. Senate this week was devoted to the passage of a bill that would extend the Internet tax moratorium four years and eliminate state and local taxes on DSL in November 2005. But lost in the shuffle were a couple of Senate Commerce Committee hearings conducted as a precursor for Congress revisiting the Telecom Act beginning next year.

Some of the more interesting ideas proposed by those offering testimony included the following:

(1) Keep it as simple as possible. Much of the telecom industry's problems were attributed to broad, vague language in the act, leading to an "incredible maze of litigation," according to George Gilder, senior fellow for the Technology and Democracy Project at the Discovery Institute.

(2) Write laws, not delegation orders--a corollary to the first item. Too often, the Telecom Act delegated to the FCC instead of clearly stating a law for the agency to enforce. "You can't deregulate an industry by granting regulators more power," said Adam Thierer, director of telecommunications studies at the Cato Institute.

(3) Streamline regulation. Gilder called for the FCC to be the lone regulatory body for telecom, so a national telecom policy could be pursued. However, leaving state commissions out of the mix was not a consensus viewpoint, with AT&T CEO David Dorman expressing support for their efforts. Meanwhile, Charles Ferguson, senior fellow of economic studies at the Brookings Institution, said the fact that the telecom industry spends more on litigation and regulation than on research and development is evidence that the regulatory structure needs to be revamped.

(4) Establish regulatory parity between technologies. This theme was repeated often. "A bit is a bit is a bit and should be regulated as such," said Raymond Gifford, president of the Progress & Freedom Foundation.

(5) Set a universal service goal. Gifford said one problem with the Telecom Act is that it tried to achieve the "incompatible goals" of market competition and universal service. Congress needs to determine what, if any, services should be subsidized to ensure ubiquity, he said. Meanwhile, Qwest Communications CEO Richard Notebaert said Congress should decide on a universal service goal and then determine how to fund it. Currently, Congress wants to identify ways to expand contributions for the universal service fund before determining uses for the money.

It will be interesting to see how many of these ideas become part of the next telecom legislation package, if one ever gets passed in the next couple of years. Many of these notions sound good in a hearing, but may not play as well in the harsh arena of political reality.

E-mail me at djackson@primediabusiness.com.