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February 22, 2002
CONTACT: David Fish
(202) 289-8928

Less Regulation Would Spur Broadband Growth
New Paper Provides Background for Tauzin-Dingell Debate

WASHINGTON, D.C. - The best way to achieve the goal of more rapid growth in the telecommunications sector is to reduce regulations that impede it. That is the conclusion reached by most speakers at a recent Progress & Freedom Foundation seminar, “Broadband Regulation: Should Congress Act?” The remarks of the four participants representing varied viewpoints, as well as those of Randolph J. May and Jeffrey A. Eisenach of the Foundation, are found in a paper released today.

“On the key question discussed at the session, there was substantial – if not unanimous – agreement that less regulation would spur investment in new broadband facilities,” said May, who is Senior Fellow and Director of Communications Policy Studies.

C. Lincoln Hoewing of Verizon highlighted the “regulatory advantage” held by the cable industry in broadband development. “They don’t have regulation, requirements for providing access or restrictions on pricing,” he said. “Basically, they’re able to do packaging, bundling and deployment in ways that fit the market the way they see it.” He said a major concern of his sector is investing in broadband, only to have to share it with competitors.

John D. Windhausen, Jr., who heads the Association of Local Telephone Services, holds a different view. To begin, unlike the rest of the panel, he does not support deregulatory legislation by Congressmen Tauzin and Dingell. He fears it would harm the interests of new entrants. “We are not yet in a position where we can build a ubiquitous local phone network to duplicate the network built by the Bell companies,” he said. “We have to interconnect with their network in order to complete our phone calls.”

Peter Pitsch of Intel addressed the economics of deployment decisions in light of current regulations. “Look at the relevant market and competition analysis, and you’ll conclude, both in terms of deployment and competition, that sound public policy…would not require unbundling for the new fiber overlay network.”

Thomas Hazlett of The Manhattan Institute cited a new movement toward deregulation that may be replacing the tactic of promoting regulations to hobble one’s competitors in other sectors. “…a great movement within the ILEC world has seen [them] move away from promoting open access on their cable rivals and move toward a pro-deregulatory stance themselves,” he said.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation