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Politics : Politics for Pros- moderated
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From: LindyBill8/9/2005 1:06:44 AM
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Strike Up the Broadband
WSJ.com - August 9, 2005; Page A10

In telecommunications, one of the most heavily regulated sectors of the U.S. economy, classifications matter greatly. So free-marketers have reason to applaud Friday's decision by the Federal Communications Commission to reclassify high-speed Internet connections offered by telephone companies.

The ruling means that a digital-subscriber line (DSL) hook-up offered by the Baby Bells will be treated as an "information service" instead of a more tightly regulated "telecommunications service." And that means phone companies will no longer have to share their networks with rival Internet-service providers at rates set by the government.

Phone companies have long sought to end this competitive disadvantage, and the Supreme Court's Brand X decision in June -- which held that the FCC could update its rules to reflect current telecom marketplace realities -- paved the way. But it's not just the likes of Verizon and SBC that stand to gain from a policy that levels the broadband playing field. According to the FCC, legacy phone regulations have caused broadband vendors "to delay development and deployment of innovations to consumers." Putting DSL and cable-modem service on equal footing promotes both competition and investment.

The 4-0 decision by the FCC is also a testament to the political skills of new Republican Chairman Kevin Martin. Democrats on the Commission (currently split 2-2 along party lines) had been reluctant to end the sharing requirements. But Mr. Martin to his credit moved swiftly after the Supreme Court ruling to forge a consensus and convince his colleagues that prices are best determined by consumers, not regulators.
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