Businessweek Archives

Setting New Telecom Rules Of The Road


Editorials

SETTING NEW TELECOM RULES OF THE ROAD

So far, so good. With the Clinton Administration, and particularly Vice-President Gore, cheerleading from the sidelines, U.S. telecommunications, cable-TV, computer, and media companies are racing to lay the groundwork for the Information Superhighway. Private companies and investors will spend hundreds of billions before they're finished. When they're done, consumers will have access to a rich variety of interactive programming--from movies on demand and home shopping to "virtual" museum tours. And the U.S. could wind up with the most advanced information infrastructure in the world.

But now is the time for government to lay down a new set of rules, as the Vice-President said in a speech on Jan. 11 in Los Angeles. The new telecommunications rules of the road have to reflect the realities of the Information Age (page 88)--an age in which digital technology blurs the lines between the telephone, computer, video, information, and entertainment industries. The goal is to write legislation that encourages investment in the electronic superhighway but steers clear of promoting heavy-handed regulation or industrial monopoly.

What should Washington do?

-- Set a specific timetable for introducing competition between phone and cable systems. Cable companies worry that the cash-rich phone companies will overwhelm them, and local-phone companies worry that cable companies will cherry-pick their best customers. Both want long delays, and Gore is wrong to agree with them. There should be free competition by 1997.

-- Guarantee access to all. Maintaining an open system, not managing scarcity, should be the principle that guides Washington's regulatory stance. The Communications Act of 1934 gave government the right to license broadcasters on the basis of scarce airspace. This concept evaporates in the face of unlimited bandwidth. What is important now is the ability of all information providers to gain access to the Information Superhighway at reasonable cost. The same is true for individual customers. How can rural folks or the poor get access to the electronic network? What is the information equivalent of the dial tone that is guaranteed today?

If the history of the phone and cable industries is any guide, there will be a tendency toward natural monopoly on the part of the distributors along the Information Superhighway. Hastening the advent of true competition and writing new rules to keep the game open and clean is the best way the Administration and Congress can encourage this amazing revolution in our lives.


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus