Of Bytes, Pixels, Phones, and Sausages

By: Scott Bradner

The lead in to the Communications Act of 1995, just passed by U.S. House of Representatives, says that the bill is "To promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies." Neat-o, just what I always wanted -- Congress helping to ensure quality service and new technologies.

There is a lot to this bill (31K words, for example) and it could have profound effects on not only telephone and cable TV services, but also, by extension, to the future direction of the national and international data network we now call the Internet. The bill specifically seeks to change the future direction of the provision of telecommunications services away from the current local regulated monopolies into a glorious future of open competition.

Telecommunications, by the way, is defined as "the transmission, between or among points specified by the subscriber, of information of the subscriber's choosing, without change in the form or content of the information as sent and received, by means of an electromagnetic transmission medium, including all instrumentalities, facilities, apparatus, and services (including the collection, storage, forwarding, switching, and delivery of such information) essential to such transmission." Terse these guys aren't, but I sure am glad to know what we have been talking about all this time.

In general this is a deregulation bill with a number of tweaks, some larger than others, to protect some of the established interests, and, in some places, the public. For example, it prohibits a telephone service provider from taking over a cable provider in the same service area, this ensuring that there will be multiple providers of the wire into the house. (Strangely enough it does not prohibit the reverse, a cable company taking over a telephone company.) There is a widely reported exception to this which permits takeovers where the cable system serves a franchise area with less than 35,000 inhabitants. The wording is such that it seems to permit a phone company to buy up bunches of cable systems as long as each one serves a small area. I, for one, am not much of a fan of this exception and think it will make for quite high prices in a whole lot of the country.

The bill could also go a long way to remove the advantage of companies who have existing rights of way. It requires that the holders of such rights must lease pole attachment space, conduit space and other similar facilities to telecommunications companies and "charge just and reasonable and nondiscriminatory rates" for the use. This could make it far easier for new companies to enter the connection business.

There are also a few quite strange things in the bill, for example, a U.S. ship "shall not be required to be equipped with a radio telegraphy station operated by one or more radio officers or operators."

This bill is a congressional work in progress and one should remember what someone (I think it was Will Rogers) said about the inadvisability of watching congress make laws or butchers make sausage. It is quite hard to try and predict just what, if anything, will come of all of this furry. With the Senate having somewhat different views on many of these topics and the phone companies spending millions on TV advertising to try and modify parts of the bill, it could be hard to even recognize any part of HR 1555 in what comes out the other end of the meat grinder. But, in general the idea that congress is helping to ensure quality service and new technologies will take some getting used to.

The text of bills like this and quite a bit of other congressional information can be found on the web at http://thomas.loc.gov.

Disclaimer: I consulted neither Harvard's Business School, which educates the discreetly greedy, nor the Kennedy School of Government, developers of legal sausage makers, in forming the above opinions.