New Tech, Old Regs
Breathtaking technological progress over the last two decades in the telecommunications industry has far outpaced government regulators' ability to keep up. The lines separating one sector from another are rapidly disappearing.
Different technologies - computers, television, cable, and phone service - are all heading toward the same end point. You can watch movies and speak with friends on your PC. You can listen to a radio broadcast of your favorite sports team over the Internet from anywhere. You can log on to the Web using your TV.
Both cable TV and new high-speed digital subscriber telephone lines (DSL) can bring you digital telephone and Internet service. Cellular and digital phones are rapidly making inroads against local phone companies - and more competition is coming in the local market.
Federal regulators are often left bringing up the rear. Their goal is to protect competition, so that the public has ample access to technology at lower prices. But with technology's advances, deciding what's anticompetitive is a very subjective, even speculative, call. There's no way to predict where the market is headed.
A great deal of concern currently centers around AT&T's purchase last year of cable powerhouse Tele-Communications Inc. (TCI). Some worry it will allow AT&T to dominate access to the Internet over broadband, or cable. Right now, Internet service providers who want to use AT&T's Excite@Home high-speed cable service must pay a fee, while AT&T does not.
The Federal Communications Commission is rightly taking a hands-off approach, waiting to see how the market develops. After all, the DSL lines mean cable isn't the only way to get high-speed Internet access.
But a bill in Congress would force AT&T to "open" its cable to all Internet comers. Rival GTE Corp. has filed an antitrust suit against AT&T. America Online wants the federal government to step in and mandate open access.
In addition, local governments in Oregon and Florida are mistakenly trying to force AT&T to do so. It's one of those things that sounds good, but it would lead to regulatory rate-setting, exactly the wrong direction to go.