Common-Sense Legislation for the Broadband Era

Published February 1, 2006

Telecommunications reform will be heating up at the federal and state levels in 2006.

Last year saw the introduction of three major telecom reform bills in the Senate: the Community Broadband Act of 2005 (S. 1294), sponsored by Sens. John Kerry (D-MA) and John McCain (R-AZ); a bill to establish a market-driven telecom marketplace (S. 1504), sponsored by Sens. McCain, John Ensign (R-NV), and Trent Lott (R-MS); and The Digital Age Communications Act (DACA) of 2005, as of yet unnumbered, introduced in December by Sen. Jim DeMint (R-SC). Of the three, DACA represents Congress’s best and soundest approach to federal and state telecom policy reform so far.

DACA is a ground-up restructuring of the regulatory regime. It calls for a “single, unified, minimally pervasive” approach to telecom regulation. The bill has a great starting point: It does not create a lengthy glossary of service provider categories. The legislation simply addresses providers of “electronic communications networks.” No more, no less.

In deciding whether regulatory intervention is necessary, the Federal Communications Commission (FCC) would apply an “unfair competition” standard that would require the agency’s decisions to be based on a market-oriented competition analysis such as that commonly employed by the Federal Trade Commission and Department of Justice. Under the bill’s approach, much more of the FCC’s regulation will occur through ex-post adjudication–addressing specific problems when they occur–rather than through anticipatory and overly broad prescriptive rulemaking.

The DACA legislation also recognizes competition serves consumers best. It seeks to end price regulation, discriminatory taxation, and unnecessary subsidies that support obsolete business models and prevent new investment from taking root. At the forefront is the bill’s dramatic new plan for universal service, built on the principles of affordability, efficiency, technological neutrality, and transparency.

DACA is by far the boldest among the telecommunications bills introduced in Congress. Yet it is also the simplest. It seeks neither to shackle service providers nor coddle them. The bill respects market forces and does not assume that to create opportunities for one group the government needs to penalize others.

Instead, DACA provides the industry as a whole with the freedom and flexibility desperately needed to move forward toward creating an environment of rich, affordable, and ubiquitous service.

The DACA bill draws heavily from work spearheaded by the Progress & Freedom Foundation, which in turn sought input from a number of free-market think tanks across the country, including The Heartland Institute. Much of that work, as well as analysis, comments, and blogging, can be found online at

Steven Titch ([email protected]) is senior fellow for information technology and telecommunications at The Heartland Institute.