Marking the third anniversary of the 1996 Telecommunications Act
regulating open competition of telecommunications technologies, U S West president and CEO Solomon D.
Trujillo said that the 1996 Telecommunications Act is not working
as Congress intended.
In a speech made at the Economic Strategy Institute’s America’s Broadband
Future forum in Washington D.C. Thursday, Trujillo said that “FCC policies are limiting new services and
choices for most consumers, and acting as a roadblock that is keeping
millions of Americans off the Information Superhighway.”
Trujillo said FCC rules that intended to move the telecommunications
industry from a regulated environment to a free forum of open market
competition have discouraged investment in rural areas of the U.S. and
encouraged competition by new local phone companies only in the high-margin
metropolitan business market.
“What should have been rules of transition to speed full market competition
have become their own barriers and created a regulatory and legal morass
that has blunted the intent of the Act,” according to Trujillo. “The result
has been to restrict data access, limit long-distance competition and
prevent the formation of an adequate Universal Service Fund. ”
“The 1996 Telecommunications Act was passed with admirable intentions, but
it just hasn’t worked out for consumers,” said Liz Fetter, vice president
and general manager, Consumer Services Group, U S West.
“Competitors are out there all right, but all they want is the low-hanging
fruit – low-cost, high-margin business accounts. Few residential customers
or businesses in rural areas and small towns are being served by new
competitors in today’s marketplace.
“It’s time for Congress to take the necessary steps to ensure the exciting
benefits of high-speed Internet access are spread across the entire
population, not just large businesses in urban areas,” said Fetter.
Trujillo told the Economic Strategy Institute that the FCC must allow
companies like U S West to carry data services across invisible boundaries
known as Local Access Transport Areas (LATAs) in order to ensure that all
consumers receive the benefits Congress intended when it drafted the
telecommunications act.
According to Trujillo regulators need to open nationwide long-distance
services to competition. “Opening the long-distance market to competition
would do more than any other single act to improve the economics that
support the rapid deployment of high-speed, broadband services to all
customers, not just big business,” Trujillo said. He added that while the
Telecommunications Act explicitly intended to open this market, three years
have gone by and, “still no incumbent local phone company can offer
customers long-distance service. As far as the FCC is concerned, the answer
is always the same, and the answer is always ‘tomorrow.'”
Additionally, Trujillo noted that the FCC has failed to establish an
adequate Universal Service Fund (USF). Congress intended for there to be a
USF to maintain affordability. Trujillo said the FCC’s failure to follow
through on the intent of lawmakers means that it will be impossible for
less populated states to fund their own USFs without compromising
affordability.
For the most part, the FCC has failed to take regulator action on broadband
issues because the commission views the last-mile delivery problem as a
short-term issue. In theory, the FCC believes that infrastructure
technologies including cable modem access, digital subscriber line services
on existing copper, satellite and terrestrial or wireless services will
develop to universally serve the Internet’s growing need for accessible
bandwidth.
Trujillo added that in the three years since passage of the
Telecommunications Act, the FCChas made a mockery of Congress’ original
goal of encouraging telecommunications competition and benefiting all
consumers. “In an economy that is increasingly based on information
technology and services, the FCC is threatening to create a nation that is
half-connected to the information highway and half-rejected,” said Trujillo.
U S West provides wired and wireless telecommunication services delivering
data networking, directory and information services to more than 25 million
customers nationally in 14 western and midwestern states.
