‘Time and tide wait for no man,” or so Geoffrey Chaucer tells us — and the medieval poet, author of “The Canterbury Tales,” never even Skyped. If he had, the phrase might have ended up differently: “Time, tide, and technology wait for no regulator, man.” The problem is especially acute in today’s telecommunications industry — whatever that is. Let’s face it: the tide of technology has rendered the word “telecommunications” just as obsolete as much of the industry’s century-old regulatory construct.
Thirty years ago when Ma Bell was broken up into a national long distance company (AT&T) and seven separate regional local telephone companies, national wireless coverage was still a dream. Today, America has more mobile devices than people. Almost 20 years ago, when Congress last revised the telecommunications laws, the power struggle centered on the last mile of copper wire entering every home in America. Today, 40 percent of homes use only cellular phones.
Yet the regulations governing our communications industry remain rooted in the world of copper wire and switched circuits invented by Alexander Graham Bell over a century ago. Those rules limit routing, access, pricing, and every other aspect of service that concerns regulators overseeing a monopoly. Such a monopoly no longer exists. Beyond wireless, a growing torrent of communication now runs through fiber, across the Internet, or embedded in applications like Facebook or Twitter. The number of people even using traditional landlines, let alone relying on them as their primary communications channel, is in freefall.
The copper networks are old and expensive to maintain. Their legacy operators — reduced through mergers to Verizon, AT&T, and CenturyLink — argue that those unnecessary costs are ultimately passed on to customers and siphon money away from innovation. For regulators, however, time stands still. Under the guise of “stability,” they rigidly require that every network and line be maintained whether they are in use or not.
Within Congress, a few modernization proposals have been put out for discussion, but no one expects a wave of bipartisan reform to sweep the Capitol. That leaves industry players, and specifically AT&T, to make the case themselves. It may not be the monopoly of the 1970s, or the long-distance titan of the 1980s, but as a dominant player AT&T recognizes the need to tread lightly as it works to bring regulators into the digital age.
The regulators appear ready for a few tentative first steps. Earlier this year, the Federal Communications Commission agreed to allow the copper network owners to experiment with programs to wean customers off copper and onto digital systems. Approval for AT&T pilot programs in Carbon Hill, Ala., and Delray Beach, Fla., could come as early as June. To his credit, FCC Chairman Tom Wheeler has warmed to the trials. The burden, however, will fall on the providers to maintain coverage for emergency service, serve rural areas, and address concerns of older residents reluctant to tackle new technology.
Old regulations die hard: Over time, companies and business models adapt to rules, even — perhaps especially — bad ones. Most notably, many competing service providers still use that last mile of network to deliver broadband, video, or voice services to their own customers. They worry about negotiating directly with AT&T or Verizon for connection fees, rather than having the feds set the rate. The incumbents respond that the system for negotiating similar “Internet peering” agreements has worked well without regulatory mandates, so too should this.
Those are legitimate questions whose answers will become clear as the trial programs progress, but they shouldn’t be used to blindly defend the status quo. The physical connections aren’t going anywhere, just the rules that micromanage their operation. Where the old copper has real economic value, it will find an owner and continue delivering benefits to consumers.
Yes, getting rid of regulations will have consequences for a few companies who depend on them most for protection, but the ultimate benefit will be felt by tens of millions of consumers who can have alternative services delivered at lower costs. And when you hear someone yearning for the good old days of heavy-handed regulation, remember that 30 years ago a typical long distance call cost 40 cents a minute.
In today’s digital and mobile universe, maintaining every run of copper wire to every home in America becomes harder to defend every day. In fact, it’s scary to think how recognizable much of that copper circuitry would still be to Alexander Graham Bell. Although I’m sure he would be flattered by our long-standing devotion, I doubt he’d be offended if, like Chaucer’s tide, we finally move on.