Oklahoma Ponders New Regulatory Course

Published January 1, 2005

The Oklahoma State Legislature missed a golden opportunity to modernize the state’s telecommunications regulations in Spring 2004 when a bill stalled in committee after passing both the House and Senate by large margins. The bill would have updated communications regulatory policy while promoting technology investment, protecting public health and safety, maintaining consumer protection, and preserving the competitive environment.

The bill’s failure presents the Oklahoma Corporation Commission with an opportunity to address the challenge. Rules pending at the commission would go a long way toward establishing cutting-edge regulatory changes.

Service providers that are less regulated, such as wireless, cable, and Voice over Internet Protocol (VoIP) companies, have been able to move quickly to offer new pricing and services to consumers. Thus, those are the technologies being adopted by consumers.

New technologies have changed the way service providers build networks and package services. As a result, each day the regulatory scheme in may states, including Oklahoma, grows more asymmetrical. For example, competitive local exchange carriers that compete with companies such as SBC are allowed to file tariffs using SBC rates as their baseline and then price under it. Cable prices are regulated with a light touch and VoIP prices, which continue to drop, are not regulated at all. SBC, however, still must justify every rate change to the state commission through a lengthy legal and bureaucratic process. It’s difficult to see how this “protects” consumers or stimulates a responsive, fast-paced telecom environment in Oklahoma.

With its proposed rules, the Corporation Commission is moving toward giving carriers like SBC some of the same flexibility already enjoyed by competitors who provide the same service but with different technologies.

Customers no longer differentiate between modes and services. If the best combination of service and price is offered by a wireless or cable provider, that’s what consumers will choose. So holding on to pervasive regulatory authority over one type of service, or acting as referee to make sure various technologies maintain whatever market share they have now, is inappropriate.

The commission should act with all due speed. Of course, the legislature still could act in the event that an unforeseen hesitation in rulemaking occurs.

But once again, Oklahoma is poised to take a leadership role in communications regulation in a sensible, reasonable, and rational way. The primary beneficiaries of these new policies will be Oklahoma consumers.

Barry Aarons ([email protected]) is a senior research fellow with the Institute for Policy Innovation, a think tank with offices in Washington, DC and Dallas. This essay originally appeared in the Daily Oklahoman.