Policy Documents

Wireless Industry Regulation

Brian Costin –
February 28, 2008

In states across the country, some legislators are proposing to increase regulations on wireless communications. Such regulations raise the cost of doing business for companies ... and in the long run, that means higher prices for consumers. Regulations also threaten to stifle investment in innovation in the name of "consumer protection."

Consumers are better served if legislators focus on enforcing contracts and removing government barriers to competition, such as high taxes and improperly labeled "consumer protection" regulations.

Over the past decade there has been a revolution in the communication technologies available to the public. Technological advances have given consumers products that weren't even conceivable 20 years ago. Wireless companies have rapidly reduced costs and improved service coverage, sound quality, and data transmission. This technological revolution has occurred despite--some would say because of--minimal government interference, other than enforcing contracts and property rights.

Considering this technological revolution was made possible by a marketplace relatively unencumbered by government regulation, it is curious that some elected officials now want to rein-in that innovation by enacting burdensome regulations on the wireless industry. Regulating the day-to-day operations of the wireless industry--contracts, billing, and the like--will tie the industry in red tape and ultimately hurt consumers.

I invite you to read the following articles, which highlight the harmful effects wireless regulation would bring and provide a deeper examination of the dynamic and rapidly innovative wireless telecommunication industry.


'First Do No Harm': Why HF 635/SF 833 Merits Another Hard Look

http://www.heartland.org/Article.cfm?artId=22814
Heartland Institute Senior Fellow Tom Lipscomb warns Minnesota legislators against becoming the first of 50 states in the Union to impose restrictive legislation regulating its wireless service.

New FCC Intrusion into Wireless Is Unneeded, Harmful

http://www.heartland.org/Article.cfm?artId=22183
Steven Titch explains that the robust wireless phone market that has driven down prices dramatically is a result of the government restraining itself from imposing unwarranted regulations on a competitive market.

Taxes and Regulation: The Effects of Mandates on Wireless Phone Users

http://www.heartland.org/Article.cfm?artId=14980
"In a highly competitive market we can expect private suppliers to compete to provide consumers with the service attributes they want. Indeed, if a mandated service were sufficiently valuable to consumers, carriers would have incentives to provide it voluntarily." Thomas Lenard and Brent Mast make the case for markets in Progress on Point by The Progress & Freedom Foundation.

Wireless Phone Costs Drop, but Taxes Skyrocket

http://www.heartland.org/Article.cfm?artId=16213
The editor of Budget & Tax News, Steve Stanek, explains that competition has led to lower prices for consumers of wireless technology, and government has continuously raised taxes and increased costs to consumers.

Wireless Industry Supports Stripping State Authority
http://www.pcmag.com/article2/0,2817,2270929,00.asp
The wireless industry is facing the prospect of a "patchwork" of state regulations. These state regulations are unwarranted based on the highly competitive nature of the market, which continues to create innovative new services and drive down costs.

New Report Blasts USF Fund
http://www.heartland.org/Article.cfm?artId=19581
Steven Titch examines the Federal Universal Service Fund and how it is mismanaged, wasteful, and raises costs for consumers of wireless and landline services.

Wireless Carriers Voice Doubts on Consumer Bill
http://www.reuters.com/article/politicsNews/idUSN2745401720080227
Highlighted here are the attempts by some legislators to micro-manage an industry, in a manner they deem in the consumers' best interest, not realizing the unintended consequences regulations cause.


For more information on telecom regulation, visit PolicyBot, The Heartland Institute's free online research database, where documents on this topic are grouped at http://www.heartland.org/PolicyBotTopic.cfm?artTopic=642. If you have any questions about this issue or the Heartland Web site, you may contact me, Heartland's assistant director for government relations, at 312/377-4000 or at bcostin@heartland.org.