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CONTACT: Patrick Ross or Amy Smorodin
November 7 , 2005
(202) 289-8928

Federalist Principles Needed in Telecom Reform
State, Federal Roles Should Reflect Evolving Communications Technology

WASHINGTON D.C. - Federalist principles applied to communications policy have the potential to reshape the regulatory roles of both the state and federal governments, states Kent Lassman in keynote remarks made at the "Second Annual Telecommunications Symposium," hosted by the University of Missouri - Columbia. In his remarks, Lassman, Research Fellow and Director of the Digital Policy Network at The Progress & Freedom Foundation, presents several arguments for why state and federal roles should be altered in future telecommunications reform. In light of the current debate over telecommunications regulation occurring in Congress, PFF is releasing Lassman's remarks in a new Progress on Point, "Applied Federalism: Shaping the Communications Landscape."

Lassman argues the changing landscape of communications is an opportunity to revise and clarify the regulatory roles of both federal and state governments. With communications taking an increasingly digital form, Lassman noted that " [d]igital signals respect the constraints of physics but not the geo-physical boundaries of law. In today's environment, the properties of light matter more than where a firm places its physical property."

Expanding his argument, Lassman cites the "virtues of institutional competencies" when determining the appropriate roles for federal and state regulators. Lassman explains that while national policies will dominate communications regulation because of its relation national economic policy, state and local governments can better serve the social and welfare interests of their respective domains.

Lassman concludes, "[t]he 'old' rationale for administrative regulation was that certain network industries are 'natural monopolies,' which, absent regulation, would raise prices and lower output to the detriment of consumers. The rationale was that certain industries exhibit such economies of scale and scope that a single firm could most efficiently supply all of the necessary output to serve the relevant market... Each of the underlying assumptions has been pushed aside by technology. In order to make a transition to a new marketplace, we must also realign our public institutions. I can think of no better guide than along the principles of federalism."

Many suggestions contained in Lassman's remarks mirror proposals made by the Digital Age Communications Act (DACA) working groups. DACA is an ongoing project in which The Progress & Freedom Foundation is working with other think tanks, members of academia and former administration officials to craft a new communications regulation model for the digital age. A second report recently released by the DACA Working Group on Federal-State Framework identifies suggested roles of states in rate regulation, provides two avenues for competition policy, and sets limits on the role of states in regulating social obligations.

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