Out with the Old, In with the New: The FCC Should Adapt Measuring Standards to Include New Telecom Competition Says IPI

2/19/2003

From: Misty Woodruff of the Institute for Policy Innovation, 972-874-5139, misty@ipi.org, http://www.ipi.org

DALLAS, Texas, Feb. 19 -- Americans no longer rely solely upon traditional long-distance and local service. Instead, they are turning to new technologies like wireless, Instant Messaging, Voice over Internet protocol, email and cable broadband for their communication and collaboration.

Thus as the FCC considers pending and future telecom legislation, it would do well to throw out old ideas about measuring competition, and consider the impact of these new technologies, according to a new study by the IPI Center for Technology Freedom of the Institute for Policy Innovation (IPI).

"New technologies are growing rapidly and are substituting for conventional voice calls. This suggests that the traditional method of measuring 'competition in voice services' should be expanded to include these new technologies," says Barry M. Aarons, author of the IPI report "Don't Call-Just Send Me an Email."

"The new competition of wireless, instant messaging, voice over Internet protocol (VoIP), cable broadband, and email suggest that the technological advance of new interactive communications is NOW, is BIG, and is SWEEPING aside traditional technologies," continues Aarons.

Government regulations like the Telecom Act of 1996 failed to anticipate the fast developing technologies that would provide overwhelming competition to traditional main lines. For example, worldwide:

-- MTLs are expected to shrink by 1/2 percent to 2 percent per year from 2001 to 2005. -- At the same time, cellular were expected to hit 71 percent of MTL penetration standard, while personal computers reached 64 percent, and Internet usage by 43 percent by the end of 2002.

Clearly, there is no longer a distinct separation between computer technology and telephone technology. Thus these new technologies represent new forms of competition for traditional providers of both local and long-distance services.

"If the experience of the past five to ten years is instructive, it tells us that communication technology and its deployment will continue to grow by almost geometric proportions-and the competition will expand even more aggressively," says Aarons.

The IPI Center for Technology Freedom is the technology division of the Institute for Policy Innovation, a non-partisan public policy research organization. Visit http://www.ipi.org for Aarons' report or contact Misty Woodruff, 972-874-5139 or misty@ipi.org.

The author is available for interview.