Whitacre stresses regulatory equity for broadband growth

ATLANTA--Broadband is the sweet spot in today's market and regulations are stifling competition. Ed Whitacre, chairman and CEO of SBC Communications stressed those two points in his keynote speech Tuesday morning. The Telecom Act of 1996 was developed for a different world and hasn't been adapted to today's data environment, he said.

"The distinction between voice and data was not a big deal in 1996," Whitacre said. "No one fully anticipated the tremendous boom in data traffic. [And] most people believed interLATA restrictions placed on the Bells would be lifted much sooner than they have been."

Those restrictions have stymied growth in broadband offerings. Whitacre pointedly noted that telecom companies are encumbered by regulations in the broadband arena, and as a result, they are losing market share to cable companies.

"One competitor, one kind of technology, has the lion's share of the market," he said. "It operates a closed monopoly network. It faces no obligation to make pieces of its network available to others; it doesn't have to resell its service. It does not have to make its operating systems conform to the systems used by a dozen other companies, and it doesn't provide advanced services through a separate subsidiary. Sounds a lot like the telephone market of five years ago, right?"

Really, it's the cable companies. And Whitacre is adamant that they have the advantage when it comes to providing service.

"They dominate the broadband market," he said. "Outmoded and one–sided regulations are threatening to leave cable companies as the winners."

His suggestion is to trim the regulatory restrictions on telcos. "Where regulations are less pervasive, competition has flourished, hasn't it?" Whitacre asked. Specifically, he pointed to wireless and wireless data markets, where innovation and competition have moved forward with little regulatory interference.

Incumbent and competitive local exchange carriers have "wrangled" in Washington, D.C., while cable companies pushed ahead. New regulations should address markets rather than types of companies. The Internet Freedom and Broadband Deployment Act is a step in the right direction, he said. To continue to grow the broadband market, Whitacre says trust is imperative—"trust in the marketplace and trust in competition."
Susan Biagi is Editor-in-Chief for Telephony. She can be reached at susan_biagi@intertec.com.