Regulators Need to Embrace New ‘Network Compact’ for Broadband World, Internet Innovation Alliance Says
Regulators need to embrace a new “network compact” that recognizes the large number of choices consumers now have, relative to what was available in the former, more regulated communications world, the Internet Innovation Alliance said Wednesday in a white paper, “The New Network Compact: Consumers Are in Charge.” The paper was authored by Anna-Maria Kovacs, visiting senior policy scholar at the Georgetown Center for Business and Public Policy.
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Among the signs of change, in 1996, when the Telecom Act was approved, 94 percent of households subscribed to plain old telephone service (POTS), Kovacs wrote (http://bit.ly/1ldUOkA). Today, only 5 percent of consumers rely exclusively on POTS, and at the end of last year 41 percent of subscribers relied on wireless alone for voice communications, “eight times as many as those who relied exclusively on POTS,” Kovacs notes. Another big change: Consumers are replacing voice calls with tweets, posts on social networks or other ways of communicating that do not support Universal Service, the paper said. Consumers get their broadband from a variety of platforms, including mobile, cable, wireline DSL and wireline fiber, and fixed satellite.
"Competition is a relative newcomer to the U.S. communications arena, but it has quickly empowered consumers to make their own communications choices based on their own priorities, which do not necessarily match those of their regulators,” the paper argues.
The challenge for regulators is to protect consumers while not limiting the choices they have, Kovacs said during a call with reporters Wednesday. “That is very much a challenge.” Consumers have “innumerable choices,” she said. “The control that regulators had over consumer behavior through network providers no longer works.” Regulators can no longer force consumers to act a certain way and that means regulators have to learn to use persuasion, she said.
Kovacs was asked about the huge number of comments filed by consumers on the FCC’s net neutrality rules. The more than 1 million comments say, “I like the world the way it is, don’t change it,” she said. “Don’t take away the choices that I have right now.” Regulators and industry officials are struggling to find a way to preserve the status quo, to preserve net neutrality rules within the FCC’s authority, she said.
"Because consumers today don’t have to purchase what regulators design and a monopolist provides, they can’t be treated as a homogeneous body without choices,” Kovacs said. “A ‘one-size-fits-all’ solution is no longer viable.”
Former Rep. Rick Boucher, D-Va., IIA honorary chairman, said on the call with reporters that regulators are starting to get a bead on the sweeping changes in communications. “I think it’s going to be understood to a much greater extent as time goes on,” he said.
Boucher cited FCC’s Lifeline program as an area where change is likely to keep up with a changing world. Many have been urging that the program be expanded to pay for broadband as well as voice, he said. “Today the Lifeline subsidy goes to the service provider,” Boucher said. “In the future, the best way to handle this might be to make it user directed so that the consumer can utilize the subsidy in the way that he thinks best.”