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NEWS RELEASE
May 8, 2003
CONTACT: David Fish
(202) 289-8928
   

Regulatory Parity No Reason to
Choke Competition

Gifford: FCC Should Not Impose 'Equal Access' on New Entrants

WASHINGTON, D.C. - Regulatory parity is not a good reason for the FCC to impose long-distance ‘equal access’ requirements on competitive telecommunications carriers because “sharing the misery of federal regulations will do nothing to expand competition or benefit consumers.” That is the view of Progress & Freedom Foundation President Raymond L. Gifford, who warns that foisting regulations on new entrants would likely end a low-cost long-distance option.

According to Gifford, equal access regulation may have been useful when the goal was to open long-distance markets to competition. But, today, long-distance is vanishing as a distinct market and becoming available in packages of services from a growing number of companies. Thus he argues that regulatory symmetry might just as well be reached by reducing requirements on incumbent providers, as increasing them on new entrants.

“The regulatory model for the FCC to embrace here is the deregulatory one of wireless,” Gifford wrote in a recent article. “When companies – be they incumbents or new entrants – are given maximum flexibility to tailor packages of services without regulatory mandates, consumers are better off.”

“It is time to reduce regulations in the telecommunications marketplace for all players, not to impose new ones on an emerging sector,” he said. “There is no reason consumers should have to bear the brunt of increased regulatory gamesmanship.”

The gamesmanship to which he refers is that of “long-term commercial recipients of universal service subsidies” who seek “to deter entry into their markets and raise competitors’ costs.” The deadline for public comments in the FCC’s universal service proceeding was last week. The ultimate decision whether or not to seek parity by increasing regulations will be decided by a very close vote, Gifford said.

The Progress & Freedom Foundation is a market-oriented think tank that studies the impact of the digital revolution and its implications for public policy. It is a 501(c)(3) nonprofit organization founded in 1993.

 

 

The Progress & Freedom Foundation