Thursday, April 13, 2006 - The Progress & Freedom Foundation Blog

Progress in the Debate on Local Telecom Reform?

The nationwide debate regarding whether and how states and cities should help regulate digital age communications has evolved considerably in recent months. Thus, it is interesting to note how well areas of developing consensus were anticipated by a working group of university and other scholars back in autumn of last year.

The working group, part of the Digital Age Communications Act (DACA) project, examined and recommended improvements to the framework for state and local regulation. Among other things, the group proposed streamlining the franchising process to accelerate entry by new video service providers, while recognizing that cities have interests and expertise regarding various issues (e.g., rights-of-way management, consumer protection) that should not be overlooked. The group also left the decision whether to permit cities to provide WiFi or other broadband service to states and cities, even as it proposed denying municipal enterprises favorable or otherwise anticompetitive regulatory treatment. The group determined that private investment in broadband would be discouraged if regulation favored municipal broadband providers.

There seems to be growing support for some of these points even among state and local representatives. At a recent conference, for example, state legislators resolved to expedite video franchising decisions [TRDaily subscription required]. Cities have emphasized increasingly that they don't reject that goal, though they still pooh-pooh concerns that existing franchise regulation stifles regulation. And both states and cities appear to recognize that cities have some role in regulating or advising on such issues as rights-of-way and consumer protection. These views seem largely consistent with and accommodated by the working group's suggestion that franchise regulation could be streamlined while still affording states some flexibility to delegate authority for cities to address rights-of way, public safety and homeland security and consumer protection.

Similarly, states' and cities' views [TRDaily subscription required] regarding municipally-provided broadband appear to have much in common with the working group's treatment of that issue. Specifically, although states and cities may not agree on whether to restrict municipal broadband, state legislators, at least, prefer to decide the issue themselves, rather than having Congress decide. Again, these views seem largely consistent with and accommodated by the working group's decision not to urge Congress to preempt municipal broadband efforts at this time. The group recognized, however, the risk that municipal providers would enjoy preferential regulatory treatment, and thus recommended subjecting those providers to the same anticompetitive scrutiny the DACA project proposed for all communications providers.

It would be easy, of course, to overstate the apparent overlap in policy direction between state and local regulators and forward-thinking proposals like that of the working group. In particular, those who share the working group's goal of reducing regulation to enhance entry into the video market still can go to war over who gets to convert any high-level consensus that develops into specific rules or prohibitions (e.g., states asserting control over franchise streamlining in an attempt to obviate federal efforts). But if all sides continue to see merit in expediting new approvals to provide video service and in safeguarding private broadband investment, consumers will win the larger war no matter who wins the underlying regulatory battles.

posted by Kyle Dixon @ 2:24 PM | Broadband , Capitol Hill , Communications , DACA , General , Internet , Municipal Ownership , State Policy , Wireless , Wireline