Texas must make rules for info superhighway

[Robbie Westmoreland <robbiew () inviso com>]

On the theory that this would be of general interest, here is an editorial
that just appeared in the Houston Chronicle.  I do not have permission to
reproduce this material, and I assume responsibility for any copyright
violations that this post incurs.  Reposting of this editorial into other
fora is done only at the poster's own risk.  There, that's enough of
a disclaimer.

[By Robert W. Gee, chairman of the Texas Public Utility Commission;
Houston Chronicle, 8/12, opinion/editorial page]

Proposals to change the way the Public Utility Commission regulates
local telephone companies were sharply debated during the recent
session of the Legislature.  Before those efforts stalled,
significant questions were raised, such as whether competition has
made strict rate-setting by the PUC unnecessary, and whether phone
companies should be allowed to keep more earnings to invest in new
fiber optic cable infrastructure.
     While important, these questions are only part of a much
larger picture.  Much has been written lately concerning the rush
to create a "national information superhighway," portrayed as
potentially having a greater impact on this nation than did the
interstate highway system.  In his February budget package,
President Clinton announced as a priority the development of a
broadband, interactive telecommunications network linking the
nations businesses, schools, libraries, hospitals and governments,
with government providing seed money toward developing this
network.
     While the future telecommunications landscape remains hazy,
three significant facts are clear.  First, technological advances
are daily eroding previous distinctions between communications and
information services.  Over the past decade, the Federal
Communications Commission has gone to great lengths to define the
difference between a telephone (which it regulates) and a computer
(which it does not).  The distinction between a telephone and a
computer is becoming less clear every day.
     Second, the law that shaped the structure of the
telecommunications industry is being re-evaluated.  The court
ruling that divested ATT of its local Bell operating companies
(the "Baby Bells") prohibited it from offering local telephone
service and the Baby Bells from offering most long-distance
telephone services.  Congress has restricted cross-ownership
between the Baby Bells and cable TV systems serving the same
geographic markers.  Today, however, we see cellular telephone
systems, originally intended to provide wireless local service,
also offering the functional equivalent of long-distance wireless
service.  Some cellular systems are owned by land-based local
telephone companies.  We also see Baby Bells buying cable systems
outside their current markets.  Thus, foes in some markets are
becoming allies in others.  The chief executive officer of one Baby
Bell, U.S. West, recently said: "We're not looking to beat the
competition, but to be the competition."
     Finally, because of such rapid changes, state and federal
lawmakers and regulators are constantly re-evaluating regulation. 
Because the local telephone company now faces competition in some
markets from cable companies as well as from non-regulated fiber
optic companies (known as competitive access providers), calls for
relaxed regulation are being voiced.  While the telephone company's
proposal for greater freedom appears simple, in fact it is quite
complex.  Because the telephone company is still the main, if not
sole, means of access to the network "highway," considerable
potential remains for self-dealing and discrimination against
competitors or captive customers.  Thus, any change in the
regulatory framework must protect captive customers and foster
genuine competition.
     The existing regulatory scheme has been challenged on many
fronts.  For instance, Rochester Telephone Co. in New York proposes
to split itself in two, with one company offering switching and
transmission wholesale services, and the other offering retail
telephone service in competition with other providers.  Under this
proposal, the wholesaler would treat its affiliated retail
telephone company and its non-affiliates on a non-discriminatory
basis.  In return, Rochester asks that its wholesale and retail
companies be freed from traditional strict cost-of-service
regulation by the state agency.  The California Public Utilities
Commission is considering breaking up Pacific Telesis' various
packaged offerings of competitive and non-competitive services and
creating an open-access network for all users.
     These state efforts may ultimately be overtaken by
congressional proposals.  A bill pending before the Senate
Subcommittee on Communications would prevent state and local
governments from prohibiting or limiting the ability of any entity
to provide telecommunications services, including local telephone
service.  States would also be required to direct each carrier to
provide open, non-discriminatory access to each separate network
function.  If enacted, this bill would make the telephone services
you receive today fully competitive.  However, the future of this
proposal is uncertain.
     In Texas, the legislative leadership is forming a joint
interim legislative committee to study telecommunications policy. 
In developing a telecommunications program that would benefit the
people of Texas, a good first step would be for Texas policy-makers
and interested parties to identify goals where a consensus might be
reached.  I can suggest seven:
     * The state should have a telecommunications infrastructure
that has the lowest reasonable cost and highest value (irrespective
of the more controversial questions of who pays for it or
ultimately owns it).
     * Positive impacts on economic development should be taken
into account.
     * A user should have a right to receive quality
telecommunications services no matter where that person lives.
     * Rates for basic telephone service should be affordable for
low-income users.
     * Technological advances should be harnessed to spawn
innovative services and maximize customer choice.
     * Any substitution of regulation by competition should include
safeguards to protect captive customers and preserve meaningful
competition.
     * Strong attention should be paid to maintaining high service
quality.
     Even if consensus can be reached on these points, many issues
remain to be resolved.  If you have views on these issues, I
encourage you to express them.  We are entering a critical and
exciting era for telecommunications, and public input will alter
and improve the policies that emerge.


-- 
Robbie Westmoreland                                     robbiew () inviso com
  "And if I claim to be a wise man, it surely means that I don't know..."
                                 Kansas
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