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News Release
May 19, 2003
CONTACT: David Fish
(202) 289-8928

Regulating Telecom: A Continuing Crisis?
Foundation Releases Transcript Quoting Officials & Experts

WASHINGTON, D.C. - FCC Chairman Michael Powell remarked last year that the telecommunications sector is in a state of crisis. He was right. Did the FCC’s mixed decision in the Triennial Review proceeding – with some good news for broadband competition and not-so-good news for facilities based competition in the voice marketplace – do anything to cause this crisis to abate? It may be too early to tell, particularly since many experts, including Powell himself, suspect the DC Circuit Court will force still another FCC reexamination of major elements of its decision.

In the meantime – and to prepare for another FCC re-visitation of its regulations – The Progress & Freedom Foundation is releasing a paper containing a transcript of an earlier seminar, “Telecrisis: How Regulation Stifles High-Speed Internet Access.” The discussion featured FCC Commissioner Kevin Martin, Assistant Secretary for Technology Policy Bruce Mehlman, Senior Counsel to the Senate Commerce committee William Bailey, and three contributors to a book published by the Pacific Research Institute under the same title as the conference. It took place last winter.

Martin spoke on numerous regulatory topics, including broadband incentives, regulatory uncertainty and the need “to be very responsive to the Court’s concerns about the nature of the current competitive environment.” Mehlman said regulations contributed to the crisis, but pointed to additional causes: corporate debt, excess capacity, pricing pressure and difficult access to capital. He warned against a “digital New Deal” for broadband. Bailey took issue with those who “use the word ‘deregulation’ and really mean ‘re-regulation,” and expressed his faith in markets. One of the book’s authors, Adam Thierer of the CATO Institute, said telecom policies “directly or indirectly restrict output on the supply side of the equation.” He argued that burdens on the sector include “the pervasive mentality of infrastructure sharing, a lack of uniformity in regulating different platforms and overlapping rules and regulations.” Thierer also noted “inefficient universal subsidization policies”, rights of way and taxes.

Randolph J. May, a senior fellow and director of communications policy studies at the Foundation, and a contributor to the book, discussed his 10 benchmarks that measure state deregulatory action. Edward Hearst, another contributor, warned against “preemptive regulation,” arguing that if the decision is made to regulate, allowing time to see how the technology or market develops can result in better regulation and fewer revisions.

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