Teletopia: A New Regulatory Agenda for America

Prices are continuing to escalate, genuine choices have been narrowed, and service quality has reached an abysmal low

by / September 3, 2005
Telecommunications Utopia or "Teletopia" -- a term first coined by the Japanese Ministry of Posts and Telecommunications to describe what 21st Century Japan would look like when its new broadband communications infrastructure was in place -- was launched almost twenty five years ago. Teletopia -- that bold new information Mecca -- has yet to materialize in Japan, the U.S., or any other nation.

To be fair, our vision or "field of dreams," like Japan's Teletopia, only gained momentum a little over a decade ago with the election of President Clinton and Vice President Gore. Al Gore particularly, was so persuaded of the importance of new robust telecommunications infrastructure that he and Clinton launched the National Information Initiative (or NII) within a matter of weeks of their new administration, and soon after announced "Internet II", the next generation of the still-to-be-defined Internet revolution.

Unlike Japan's approach which was tantamount to a huge public works project, the underlying premise of Wall Street money managers, telecom executives and regulators alike was the same: if the regulators would open the gates and the capitol markets to their pocketbooks, within a relatively short time, we would build a new broadband future ushering in a cornucopia of new-age information products and services.

At the heart of the policy debate was to find a way to allow both competition and monopoly to coexist. But that task was neither easy nor susceptible to simple solutions, although the Commission tried its best to steer a careful course between the wasteful extreme of unregulated monopoly and the kind of regulated competition that has ailed us in the past.

Since 1980, the Federal Communications Commission, and to a certain extent the Congress, has certainly tried to find ways for monopoly and competition to coexist, and allow the Bell System operating companies to participate in many ways in the development of the new information infrastructure and its products and services.

Sadly, most of their efforts to create new entry into the field -- such as the creation of value-added carriers like the Datran Corporation which folded after a $100 million investment; specialized common carriers mimicking MCI's success; and various interconnection proceedings which would allow both terminal equipment and other competitive access carriers to get a foothold in the market -- have for the most part, failed.

Even today, almost a decade after President Clinton promised "lower prices, better quality and greater choices in telephone and cable services," prices are continuing to escalate, genuine choices have been narrowed, and service quality has reached an abysmal low. At the local level, as communities around the world begin to sketch out the first drafts of their digital future, U.S. cities are at a loss as to how to proceed.

Most of the major telecommunications providers would prefer to keep it that way. Indeed, the Telecommunications Reform Act of 1996 was written largely by the telecommunications companies themselves with very little public support or involvement from non-telecom firms, state or local municipalities or the general public.

To telecom companies, the idea that the public might awaken to the soundness of rebuilding local communications infrastructures and create a sort of local public telecommunications utility -- a monopoly if you will-- is alarming.

Not surprisingly, state legislatures around the country are now lobbied daily for legislation to prohibit any municipality from even entertaining such a notion. Electric, gas and water utilities, each of which is also in a position to provide the new broadband telecommunications infrastructures, are also being targeted with laws that would bar their entry into the telecommunications business in any manner.

In the long view of history, some analysts argue, the cable, wireless and satellite industries will offer real alternatives to the traditional monopoly carriers and eventually, as economies of scale are achieved, rates too will fall.

In the long view of history, however, more businesses large and small -- increasingly dependent upon the ubiquitous broadband telecommunications networks -- will atrophy or die. In the long view, consumers will grow more weary and wary of our Internet future. The "teletopia" field of dreams of e-commerce, e-government, e-health and other visions of America in an information economy will wither away as well.

The future of telecommunications in America is everyone's business. Every institution large and small, every consumer group and municipality throughout America has to take ownership of this fundamental fact: "information has replaced gold as the new monetary standard," as Walter Wriston, former Chairman of Citibank once put it, and information technologies are the tools of wealth creation.

To succeed and survive in the new economy, America -- its institutions public and private, large and small, and the growing number of entrepreneurs and consumers alike throughout this country -- must involve themselves in the public policy process and in the public arena, which will help shape telecommunications policy in the 21st Century.

Those who care can do several things. First, begin the call for new federal legislation. The new Martin Federal Communications Commission and Bush Administration have heard from business and consumer groups alike that the 1996 Act was born in an analog age.

Over five years ago, Adam B. Thierer, director of Telecommunication Studies and a member of the Bush/Cheney transition team, wrote that: "The Telecom Act with its backward-looking focus on correcting the market problems of a bygone era has been a failure. Instead of thoroughly clearing out the regulatory deadwood of the past, legislators and regulators have engaged in an effort to rework regulatory paradigms that were outmoded decades ago."

Surely there is need for new telecommunications reform in which everyone has a stake. Such reform should not move forward, however, without the real stakeholders, the users and consumers of telecommunications, actively involved.

It is also important that the stakeholders organize themselves to exploit telecommunications, particularly access to broadband Internet services, as an essential ingredient to transforming their business or service, and to their ultimate success and survival. Short of meaningful regulatory reform, new alliances and coalitions need to be encouraged in order to ensure access at reasonable rates and to ensure maximum quality of services, which could manifest itself in many ways.

This requires recognition, commitment and action -- a sustained effort on the part of all the stakeholders to educate a new generation of users and consumers and citizens alike. Unless we do that, there will not be a "Second American Century," because there will not be a telecommunications utopia or anything nearly resembling it. The hopes and dreams of an America in the Information Age -- a leader of the new global knowledge-based economy and society -- will have become captive of the gnarled bureaucracy and politics of our time.

John M. Eger, a telecommunications lawyer and Van Deerlin Professor of Communications and Public Policy at San Diego State University, was telecommunications advisor to Presidents Richard Nixon and Gerald Ford, and director of the White House Office of Telecommunication Policy.
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