August 14, 2015

Why You Should Care About Tech Transitions

At the FCC meeting on August 6th, the Commission approved new rules as part of its widely anticipated “Technology Transitions” order — but why should you care? Well if your business uses broadband to sell to, service, or communicate with your customers (that’s just about everybody, right?) then this order means that your choice among providers of fast, affordable and custom-tailored broadband solutions will be available for years to come.

The FCC ruling told the big incumbents that simply changing some components of their network does not change the law. This was a victory for competition, a victory for choice, and a victory for innovation. Unlike the residential market where you generally have two incumbent providers (the cable company and the phone company), or the wireless market where you may have four nationwide providers (AT&T, Sprint, T-Mobile and Verizon), the vast majority of business locations in America have only one connection – a connection dominated by the legacy monopolist that had exclusive rights to every building and home in America for nearly a century. This means that short of completely overbuilding an existing network in order to create competition, Congress had to actually create the wholesale access market and a new competitive regime.

Specifically, Congress addressed these challenges nearly twenty years ago when the Telecommunications Act of 1996 became the law of the land and unleashed competition into the telecom marketplace. This allowed consumers the ability to choose between many competing providers, rather than being tethered to the one Baby Bell company that happened to inherit the connection to their building. The result of the Telecommunications Act has been nothing short of extraordinary. Since 1996, competitors and incumbents have invested nearly $1.3 Trillion in broadband infrastructure – which has led to newer, faster, and more innovative services than had ever been seen before.

In the end, the FCC adoption of the Tech Transitions order last week was not about incumbent providers versus competitive providers, it was about whether a business user can have its choice of providers – as was first envisioned in 1996. Never in the history of telecom have we seen such rapid innovation as we see today – a direct result of the Telecommunications Act of 1996. And from time to time, we as a nation have to reaffirm these principles which has led to this innovation – this is what the FCC has done. As the summer of competition continues to roll on at the FCC, I believe we will look back on decisions like this as playing a crucial role in the preservation of customer choice and competition as a whole.

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