Public policy should drive innovation, technology, and broadband deployment

On Thursday, November 21,2013, the Pennsylvania House Consumer Affairs Committee will hold a hearing on the Telecommunications Market Competition Act (HB 1608). By supporting and promoting passage of this important legislation, the Legislature has a unique opportunity to enact much-needed, forward-thinking reforms that will establish an innovation policy for Pennsylvania.

This bill will promote next-generation technology and competition in the communications marketplace. Updating our rules will keep Pennsylvania competitive with neighboring states by offering consumers additional choices, and in so doing, make Pennsylvania more attractive for residents and economic development alike.

We face 21st century realities that cannot be ignored:

Less than one-fifth of Pennsylvania voice connections were served by incumbent phone companies subject to legacy utility regulations at the end of 2011, according to the FCC.

Consumers are fleeing the plain-old-telephone-system legacy network. The transition for data from legacy carriers is essentially complete, and the transition for voice is well underway, as the migration to mobile and VoIP services are accelerating. In early 2014, mobile data traffic will overtake that of desktop computers.

Capital spending creates a huge multiplier effect. Communication companies represent some of the largest investors in the Keystone State’s economy and infrastructure – yet existing, outdated regulations continue to slow this investment.  We should free communications providers from the financial drag of an obsolete, and at times duplicative patchwork of regulations, so they can invest in widely deploying faster, next-generation broadband for Pennsylvanians.

Pennsylvania’s regulatory framework is not in touch reality. The incumbent phone companies remain subject to regulations that were formulated decades ago when they were monopolies with 100% market share (when traditional landline services were considered state of the art). Consider how long ago that was!

What’s more, recent experiences from states that wisely modernized their telecom rules show that there have been positive impacts on consumer pricing and service availability. The problems predicted by opponents and naysayers didn’t come true. Under modern rules that respect the pace of technological change in the communications industry, there are no instances where a communications provider had withdrawn service from a location they deemed unprofitable.

In states with a competitive communication framework (26 states have recently modernized their laws affecting the communications industry), there has been no spike in customer complaints, including complaints regarding slamming, billing, or failure to provide service.

Members of the Pennsylvania Coalition for Innovation & Competition are committed to the Commonwealth. We contribute an incredible amount in terms of employment, capital investment, community services, and charitable donations throughout the state. We think it’s time – we must enact HB 1608 so Pennsylvania can lead the new economy.