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Richard Morrison, 202.331.2273

Washington, D.C., November 3, 2005—The U.S. House Committee on Energy and Commerce this week released a “Staff Discussion Draft” of its plan for reforming regulation of the telecommunications industry. The following may be attributed to Braden Cox, Technology Counsel, Competitive Enterprise Institute:

The Staff Discussion Draft is a noticeable improvement over the draft previously circulated by the Committee. And while it updates current law to reflect new technologies and ways of communicating, for IP-based communications it actually creates new regulation. Consumers and industry alike would be best served by legislation that is deregulatory in all aspects.

The draft bill includes troubling provisions that prevent video providers from targeting early adopter consumers (“redlining”), even though this business practice is common in most other technology industries. It still requires the filing of registration statements with the FCC for broadband, VoIP and video providers—regardless of size, messaging platform or need for price regulation—that raises potential civil liberty implications. And the draft bill does nothing to reduce the number of telecommunications lawyers in Washington, D.C., due to broad language on interconnection, consumer protection, and universal service.

Broadly speaking, new telecom legislation should be more than just an update of existing law to reflect new technologies. It’s time to go back to first principles and not just revisit the 1996 Telecom Act, but analyze the basis for communications regulation itself. Market players – both consumers and telecom companies—deserve more than a mere “update.” For maximum benefit, the structure and powers exercised by the FCC need to be radically re-examined and, in most cases, phased out altogether.