USTelecom Asks: What’s the Point of Voice Regulation?
With the majority of consumers now favoring Internet-based communications and other alternatives over traditional landline voice services, does the regulation of said services still make sense? USTelecom convened a panel of experts at an event earlier today to answer that very question.
Last December, USTelecom filed a petition with the Federal Communications Commission that asked to end dominant carrier regulation of legacy voice services. This petition was filed with the intention of meeting the Commission’s established policy goal of modernizing its rules in order to “accelerate the transition from circuit-switched to IP networks, with voice ultimately one of many applications running over fixed and mobile broadband networks.” As society has shifted from using plain old telephone service offered over legacy public switched telephone network (PSTN) to IP-based services offered over fixed and mobile broadband networks for its communications needs, regulations surrounding these services needs to be updated to reflect these on-going market changes. In a blog post, USTelecom explained the negative consequences of regulating voice services on the idea that “the PSTN still constitutes a monopoly platform for the delivery of voice services.”
“Not only can such an imbalanced regulatory scheme no longer be justified, its continued enforcement by the Commission has significant negative public policy consequences. As the number of consumers choosing to [subscribe to landline telephone service] continues to decline – by more than ten per cent a year, according to the Commission – the costs of complying with these anachronistic regulations are spread across fewer and fewer consumers, proportionately increasing the burden on those consumers that remain on the legacy network. As the Commission itself has recognized, this situation is not ‘sustainable.’”
Jonathan Nuechterlein, a Partner at WilmerHale, said voice-services are looked at as uniquely important to the American consumer. This stems from the fact that voice services were the first person-to-person communication medium. John Mayo, Director of the Georgetown University Center for Business & Public Policy, said that yes, voice services are indeed important to consumers, but the technology through which it is transmitted is not. Users see the different routes to transmit voice services (wireless, landline, VoIP, cable) as interchangeable. Therefore, mandating specific carriers to deliver voice services through legacy networks is not only unnecessary, but acts as a competitive disadvantage to those carriers still required to comply with the regulatory burden.
Mayo used the wireless industry as an example of where a light regulatory touch has been beneficial and where market forces have compelled companies to deliver reliable service. Though the quality of a call on a wireless network is not perfect, profit-seeking firms have consistently improved the customer experience by decreasing the number of dropped calls and lowering prices from roughly 50 cents per minute in the past down to roughly 5 cents per minute today.
The transition to all-IP based communications technologies is an opportunity to ask if the traditional regulatory structures in place are the best policies going forward. Do regulators want to incentivize investment in the networks of tomorrow, or mandate the continued operation of the networks of yesteryear?
If technological progress is the ultimate goal, the regulatory path forward is clear.