Jul 15, 2014 - 1:45pm

Broadband is Not a Rotary-Dial Telephone

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Photo by Infrogmation via Wikicommons (This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.)

In comments filed with the Federal Communications Commission (FCC) in its Open Internet (popularly known as “net neutrality”) proceeding, the Chamber notes that using Title II of the Communications Act to regulate broadband would harm private-sector investment in broadband infrastructure, innovation, consumer choice, and job creation. “Old monopoly-era telephone rules should not be applied to broadband networks,” the U.S. Chamber’s Bill Kovacs writes in the comments.

Title II regulation, which has its origins in 1880s railroad regulation, was originally enacted as part of the Telecommunications Act of 1934—when rotary dial telephones were considered modern technology—to address potential concerns stemming from having one company as the monopoly provider of “telecommunications services.”  These regulations covered services provided by the “public switched telephone network.”  Title II regulated telephone services offered across state lines (e.g., long distance phone calls) and later was modified to regulate certain practices of the Regional Bell Operating Companies that were created in the wake of the AT&T divesture.

Traditional wireline telephony (or plain old telephone service) is on the decline; it comprised just 21.7% of the 443 million phone lines in America in 2012, down from 24.2% of 442 million phone lines in 2011. In 2012, only 5% of households relied on traditional switched telephony service exclusively. “When consumers are increasingly abandoning traditional Title II services, it is nonsensical to impose Title II regulations on new technologies,” Kovacs writes. 

Classifying broadband as a “telecommunications service” would only lead to less flexibility among providers and higher costs for consumers, Kovacs notes.  A heavy-handed, “mother-may-I” regulatory regime is not appropriate in a broadband world where companies need the flexibility to respond quickly to rapidly changing marketplace developments and consumer demand.

Per Kovacs:

As evidenced by the investment, innovation, and products available in the broadband marketplace, i]t is clear that a vibrant, thriving “open Internet” exists in the United States.  Therefore, the Commission should dismiss calls for Title II regulation of broadband because it is unnecessary and will only serve to stifle the tremendous innovation, job growth, and consumer benefits that are occurring today in the broadband market.

Read the Chamber's comments here, and our recent post on the need for more broadband investment.

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