Press Releases
|
|
Print this page |
Statement of Senator John McCain Ranking Member, Senate Committee on Commerce, Science, and Transportation Remarks on the Introduction of the Consumer Broadband Deregulation Act
August 1, 2002
Mr. President, I am introducing the Consumer Broadband Deregulation Act of 2002. This legislation takes a comprehensive, deregulatory, but measured approach to providing more Americans with more broadband choices. By ensuring that the market, not government, regulates the deployment of broadband services, the legislation will promote investment and innovation in broadband facilities – and consumers will benefit.· The bill would create a new title in the Communications Act of 1934 that would ensure that residential broadband services exist in a minimally regulated environment. The new section of the Act would also make certain that providers of broadband services are treated in a similar fashion without regard to the particular mode of providing service. The bill includes provisions that would take the following actions:
o deregulate the retail provision of residential broadband services; dictate a hands-off approach to the deployment of new facilities by telephone companies while maintaining competitors' access to legacy systems; resist government-mandated open access while providing a safety net to ensure consumers enjoy a competitive broadband services market; ensure that local and state barriers to broadband deployment are removed; facilitate deployment of broadband services to rural and unserved communities by creating an information clearing house in the federal government; maximize wireless technology as a platform for broadband services; ensure access to broadband services by people with disabilities; enhance the enforcement tools available to the FCC; and put the federal government in the role of stimulator, rather than regulator, of broadband services.
· In 1996, Congress passed the first major overhaul of telecommunications policy in 62 years. Supporters of the Telecommunications Act argued that it would create increased competition, provide consumers with a variety of new and innovative services at lower prices, and reduce the need for regulation. My principal objection to the Act was that it fundamentally regulated, not deregulated, the telecommunications industry and would lead inevitably to prolonged litigation. It has been six years since the passage of the Act, but consumers have yet to benefit. Competition denied by excessive regulation is costly to consumers.
· The latest legislative debate in the communications industry has focused on the availability of high-speed Internet access services, often called "broadband." Indeed, Federal Communications Commission Chairman, Michael Powell, has called broadband, "the central communications policy objective in America."
· There is stark disagreement about the state of affairs for broadband services in the United States. Depending on who is speaking, there is a supply problem, a demand problem, a combination of the two, or no problem at all. All parties agree, however, that Americans and our national economy will benefit greatly from the widespread use of broadband services. Accelerated broadband deployment reportedly could benefit our nation's economy by hundreds of billions of dollars.
· With such tremendous opportunity comes no shortage of "solutions." Many want a national industrial policy to drive broadband deployment – they suggest multi-billion dollar central planning efforts aimed to deliver services to consumers regardless of whether those consumers want or need such services. Others have focused on narrow issues affecting only a subset of all providers of broadband services.
· This legislation takes a different approach. It takes a comprehensive look at the proper role of the government with respect to these new services. It reduces government interference with market forces that lead to consumer welfare, and looks for ways that government can facilitate, not dictate or control, the development of broadband technologies.
· Mr. President, I am a firm believer in free market principles. In 1995, I introduced a series of amendments during the floor debate on the Telecommunications Act that would have made the bill truly deregulatory. As I said at the time, I believe that "[i]n free markets, less government usually means more innovation, more entrepreneurial opportunities, more competition, and more benefits to consumers." Likewise, in 1998, I introduced the Telecommunications Competition Act that would have allowed competition to flourish and brought true deregulation to the telecommunications market. In 1999, I introduced the Internet Regulatory Freedom Act that would have eliminated certain regulation of telephone companies' deployment of broadband facilities. And in 1999 and 2000, I was a leading advocate in the Senate for the Internet Tax Freedom Act ensuring a moratorium on taxation of the Internet.
· I stand by the legislation and amendments I previously introduced and believe that they represented the right approach at the right time. In fact, if I had it my way, I would throw out the 1996 Act and start from scratch. I am mindful, however, that broadband has been an issue that has polarized policymakers to the point of legislative paralysis. Now is the time for a measured approach that focuses on achieving what can be done to improve the deployment of services to all consumers. I believe that this legislation is such an approach.
· The bill has multiple components designed to address all aspects of broadband deployment and usage, and also provides adequate safety nets in the event that there proves to be a market failure that is harmful to consumers.
Removing Government Interference with Market Forces.
· Broadband services can be provided over multiple platforms including telephone, cable, wireless, satellite, and perhaps one day soon, power lines. Each of these platforms is regulated differently based on the nature of the service the platform was originally designed to provide. This legislation would move us closer to a harmonization of regulatory treatment of broadband services so that investment decisions are unencumbered by the regulatory ancestry of a particular platform.
· First, the bill makes clear that the retail provision of high-speed Internet service remains unregulated. The Internet's tremendous growth is a testament to the exercise of regulatory restraint.
· Some have suggested a need for government regulation of consumer broadband service quality. They allege that service deficiencies inhibit the development of these new offerings. But we must remember that these are new services, and new services will have problems. This legislation allows for these services to mature. If upon maturity, the FCC determines that there is a need to protect consumers from service quality shortcomings related to the technical provision of service, then the states can enforce uniform requirements. This provides a measured approach to service quality – a safety net without a presumption of regulation.
· Next, we must clarify that new services offered by varied providers, regardless of mode, will not be subject to the micromanagement of government regulation. Recognizing that upgrading networks requires substantial investment not free of risk, this bill begins this process by relaxing the obligations on telephone companies that invest in facilities that will bring better broadband services to more consumers. Nothing in this legislation, however, will undermine competitors' efforts to provide services using the telephone companies' legacy facilities. This approach strikes a balance between the interests of those who have invested capital on the promise of government-managed competition and those who will invest in the future of broadband facilities on the promise of government restraint and market-driven competition.
· The bill also grapples with the government-managed wholesale market for consumer broadband services -- the so-called "open access" debate. Mr. President, there is perhaps no more difficult issue addressed in this bill.
· The Internet has thrived because it is an open platform. The presence of numerous ISPs in the narrowband market certainly contributed to the vitality of this open network, particularly at the inception of the Internet. Those providers have depended on access to customers guaranteed by FCC rules. As a result, many have suggested the need for government-mandated access to customers served over broadband connections. They raise significant concerns about carriers becoming screeners of content, and anti-competitive threats to web site operators if consumers do not have a choice of ISP or are limited in their ability to access particular web sites.
· However tempting it may be to believe that government mandates will produce desired policy outcomes, such intervention too often comes at the price of market inefficiencies, stifled innovation, and increased regulatory costs. Moreover, regulators are often slow to respond to dynamic industry changes.
· The bill would rely on market forces to resolve access issues by establishing the general rule that the FCC may not impose open access requirements on any provider – no matter what platform is used to provide the consumer broadband service. Again, the bill takes a measured approach by creating a safety net for consumers. Today a multitude of ISPs rely on access mandated by the FCC to serve their customers. The bill would allow the FCC to continue to enforce these obligations during a transition period, but would mandate the sunset of such requirements unless the FCC determines their continued enforcement is necessary to preserve competition for consumers.
· I firmly believe that market forces will guide the development of a wholesale market producing sustainable, not government-managed, competition. The bill is sufficiently flexible to ensure that consumers are protected, while sending a clear signal to those parties willing to make the significant investment necessary to provide broadband services that the government will not lie in wait only to reward their risk-taking with regulation.
· I note again, however, that this issue raises challenging and complex policy questions. We should ensure the continued open nature of the Internet. To the extent that market forces prove incapable of preventing restrictions on consumers' use of the Internet or limitations on devices that consumers wish to attach to their Internet connection, we may need to consider a different approach. I look forward to continued debate on these difficult questions.
· The potential for government interference with market forces is not limited to federal regulation. State and local governments are also capable of obstructing the deployment of broadband. The bill would address this threat by precluding any state or local regulation from prohibiting the ability of any entity to provide consumer broadband service. It would also prevent localities from transforming their legitimate interest in managing their rights of way into an imposition of additional, revenue-generating financial burdens on broadband deployment.
Government Role as Facilitator of Broadband.
· Consumer broadband services should be accessible to all people, regardless of where they live, what they do, or how much they earn. We must be realistic, however, about how quickly this can occur. The bill recognizes the important role that government can play as facilitator to accelerate universal deployment by using its resources to allow communities to share information about successful efforts to attract broadband deployment.
· Government can facilitate broadband deployment and use in other ways as well. Wireless technologies like Wi-Fi and mesh networks hold tremendous promise for the delivery of consumer broadband services. Given its role in the management of spectrum, the government can impact the use of these technologies. The bill would require the FCC to examine the best role for government in fully exploiting wireless technologies as a broadband platform for the benefit of consumers.
· Although government should limit its role to those circumstances where market failure is demonstrated, Chairman Powell has suggested that the Commission must be prepared to better enforce its existing rules by increasing the Commission's ability to impose penalties on parties that act in a manner that is anticompetitive. This bill would give him the tools to do so.
· Some claim that there is a demand "problem" with broadband that is caused by the dearth of available broadband content. Here, too, government can play an important role. Certainly content is one of the factors that will drive consumers to subscribe to high-speed Internet services. Given the prominent role that the federal government plays in the lives of most Americans, it can be a source of substantial broadband content. The bill would ensure that the federal government is fully exploiting its ability to provide this content.
· Finally, I recognize that many will look at the bill and ask about broadband services used by businesses. Why treat those services differently? It is a fair question. I have stated previously that most of the advantages of the Telecommunications Act have accrued not to the average consumer who has seen only higher prices for existing services, but to business customers. It is these business customers that many competitors have attempted to serve using the facilities of the incumbent telephone companies. Moreover, whereas the cable platform is the source of robust, facilities-based competition in the consumer market, it has not developed to a similar extent in the market for business customers. Given these factors, and a desire to take a measured approach, I have generally limited the scope of this bill to the consumer broadband services market. This focus does not reflect my lack of support for a similarly deregulatory approach to the business market. Indeed, I strongly encourage Chairman Powell to be aggressive in using the tools at his disposal to remove regulations wherever appropriate in the business broadband services market.
· Mr. President, technological progress has too often been constrained by government policies that seek to control it and dictate its course. Such policies have often had the perverse effect of slowing technological advancements. The growth of the Internet demonstrates what happens when governments choose to learn from the mistakes of the past in order to build a better and richer future for our citizens. The choice we have made is to adapt our mechanisms for governance to facilitate and encourage technological change -- to facilitate rather than to control -- to monitor rather than dominate. This bill continues that course.
· I urge my colleagues to join with me in supporting this deregulatory legislation to help advance broadband in the United States.
· Mr. President, I ask that the full text of the bill be included in the record.
|