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Statement of Principles on Telecommunications Policy

Rapid technological advances are creating a revolution in communications. These advances are making possible countless new products and services which could vastly improve the quality of life in America and the competitiveness of the U.S. economy. However, these developments are being impeded by a complex and outdated web of governmental regulations.

This year, Congress will be considering a broad range of regulatory reform initiatives. Telecommunications policy reform, with its potential impact on one of the largest and most vital sectors of the U.S. economy, should be considered a crucial part of these efforts. Needed reforms include:

  1. Elimination of barriers to competition. Government should not be in the business of protecting monopolies. Federal and state policies that bar competition in the provision of local telephone, cable and other services should be eliminated.
  2. Elimination of artificial barriers between industries. Provision of many telecommunications services is kept artificially segregated by the AT&T consent decree, federal law, and FCC regulations. Barriers between telecommunications services should be eliminated as soon as possible. In particular, the long-distance service and manufacturing restrictions in the AT&T consent decree should be eliminated by a date certain. Similarly, outdated cross-ownership restrictions on broadcasters should be eliminated.
  3. Reduction of the burden of regulation. Policymakers should rely upon markets and consumers--not regulation--to determine prices and services. The role and scope of FCC regulation should therefore be greatly reduced. Competitive markets--including those for competitive local services and AT&T's long-distance service--should not be regulated. In less competitive markets where regulations has proved harmful to consumers, such as cable television, regulation should also be rolled back. In no case should rate-of-return regulation be used.
  4. Elimination of protectionist policies. Currently, federal law bars non-citizens from holding most FCC licenses. As a result, not only are consumers denied the benefits of additional investment from abroad, but foreign governments are encouraged to restrict U.S. investment. These restrictions should be repealed.
  5. Elimination of telecommunications subsidies. Current telecommunications policies contain billions of dollars in hidden cross-subsidies intended to further universal service and other goals. These payments are not targeted to those in need and are hidden from public view. If not eliminated, any subsidies should be limited in scope, targeted to those in need and subject to normal appropriations processes.
  6. Freeing the radio spectrum. The electromagnetic spectrum is currently subject to an inefficient system of central planning and control.

Frequencies should instead be assigned and allocated based on market forces, allowing new technologies to develop and consumer preferences to be better served. Licensees should be allowed to use frequencies for any purpose, as long as users of the spectrum should be extended the same First Amendment protection as other media.

Congress has a rare opportunity this year to implement long-overdue reform of telecommunications policy. Instead of trying to adapt an outdated regulatory scheme to today's telecommunications landscape, Congress should allow markets and consumers to determine the course of this industry.


C. Boyden Gray
Citizens for a Sound Economy

Thomas Duesterberg
The Competitiveness Center
The Hudson Institute
Edwin J. Feulner, Jr., Ph.D.
The Heritage Foundation

George Gilder
Senior Fellow
The Discovery Institute
George A. Keyworth
The Progress & Freedom Foundation

Bill Niskanan
The Cato Institute
Fred Smith
The Competitive Enterprise Institute


The Progress & Freedom Foundation