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CONTACT: Patrick Ross or Amy Smorodin
December 15 , 2005
(202) 289-8928

PFF Leaders Praise DeMint Telecom Bill
Competition Based Regulatory Regime Proposed

WASHINGTON D.C. - Today, Senator James DeMint (R-SC), member of the Senate Committee on Commerce, Science and Transportation Subcommittee on Technology, Innovation, introduced the Digital Communications Act of 2005. The bill proposes a market oriented, competition based regulatory approach, replacing the techno-functional constructs that have historically characterized telecommunications regulation. Leaders at The Progress & Freedom Foundation applaud the bill, which closely mirrors many of the proposals that have been put forward as part of PFF's Digital Age Communications Act (DACA) Project.

Randolph May, Senior Fellow and Director of Communications Policy Studies at the Progress & Freedom Foundation and Director of PFF's DACA Project, voices his support for the bill: "Senator DeMint has demonstrated great vision in recognizing the need for Congress, in this era of competition and convergence driven by rapid technological change, to adopt a new communications regulatory paradigm. Senator DeMint's bill wisely replaces an existing regime that ties regulation to outdated and ever-evolving techno-functional constructs with a forward-looking one that grounds the need for any regulatory intervention in an assessment of marketplace realities." PFF's President and acting co-chair of the Universal Service Working Group, Raymond Gifford, also endorses the bill. "The rigor and consumer welfare focus of competition policy helps strengthen markets and adapts well to ever-changing technologies," he said.

Senator DeMint's bill presumes that economic regulation of communications markets is unnecessary absent circumstances that demonstrate the existence of a significant threat of abuse of market power that poses a risk to consumer welfare. In deciding whether regulatory intervention is necessary, the FCC would apply an "unfair competition" standard that would require the agency's decisions to be based on a market-oriented competition analysis such as that commonly employed by the FTC and Department of Justice. Under the bill's approach, much more of the FCC's regulation will occur through ex-post adjudication based on specific facts rather than anticipatory overly broad prescriptive rulemaking. This change is also a key aspect of the first preliminary proposal by the DACA Regulatory Framework working group.

The bill proposes alterations to the Universal Service program, including the creation of a numbers-based contribution system and performance-based block grants, which would be distributed by the individual states under federal guidelines. Similar proposals were discussed extensively at last week's public forum to discuss the DACA Universal Service Working Group's Draft Document. The bill also proposes changes to the respective roles of federal and state regulatory agencies which mirror suggestions made by the DACA State and Federal Framework working group. The Act proposes that state commissions, pursuant to a narrowly focused delegation of authority, should play a role in adjudicating complaints that concern matters occurring wholly within that state.

The Digital Age Communications Act (DACA) Project was launched in February of this year with the intent of providing guidance for regulators and legislators on how to reform our nation's communications laws in an era now characterized by the emergence of competing digital services and platforms. DACA is comprised of five working groups, garnering the expertise of PFF fellows, scholars at other think tanks and universities, and public policy officials from the last five presidential administrations. Reports released by the Regulatory Framework, Federal State Framework and Universal Service working groups are available on the PFF website.

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