It Was 15 Years Ago Today….

Author: Bob Quinn, Sr. Vice President - Federal Regulatory, AT&T

Maybe that doesn’t have the toe tapping groove of the opening line from Sgt. Pepper but it seems a fitting way to mark the 15th Anniversary of the 1996 Telecommunications Act. And, maybe the occasion won’t get the same play that Facebook got for its 7th anniversary last week, but that law was the first major overhaul of America’s communications rules since the 1930s.
Think back to what “communications” meant when Congress wrote that law.

People were dialing up the Internet to access their Prodigy or CompuServe accounts. But perhaps the great technological innovation of 1996 was America Online’s introduction of the Buddy List to make IM’ing easier. Speaking of AOL, around that time, there was a memorable Time magazine cover story with the headline, “AOL Wins!” Try saying that in front of a mirror today and keeping a straight face. On the wireless front, about 38 million Americans were subscribers and their phone calls went out over the nation’s 24,000 cell towers. Today, there are about 295 million subscribers whose communication goes out over more than 250,000 cell towers.

Your phone was only slightly smaller than your shoe (The first Motorola StarTac wouldn’t hit the market until later in 1996). You watched movies on your VHS recorder, which had finally won the technology battle with Sony’s Betamax, although there was a new DVD technology just coming on the market. You may have finally purchased a car with a CD player but you probably still ran with a Walkman (the Discman still skipped while running). And this new DirecTV satellite video service was making me think I might want to replace my Continental Cable service. iPods? iPhones? iPads? Didn’t exist. I mean, Steve Jobs wasn’t even working at Apple again yet. Satellite radio? Sorry, not for another couple years. Laptops….really expensive. You Tube? Facebook? Google? Mark Zuckerberg was 12, and Larry and Sergey were PhD candidates who had known each other less than a year. Heck, the Today Show was hosted by Katie Couric and Bryant Gumbel instead of Matt and Meredith.

So, a lot’s changed since then.

At the time, no one envisioned the world we live in today. The entire regulatory silo landscape underlying the ’96 Act has collapsed. Cable, Skype and Google competing with plain old telephone service? Long distance a distant memory? Cutting the cord and going wireless only? Watching “TV” over the Internet? Surfing the Internet on a wireless broadband connection? Not really part of the plan in the mid-90s. The idea of integrated services wasn’t fully understood 15 years ago. Does anyone really think we fully grasped the importance of broadband in 1996? Of course, not. How could we? No one could have predicted the extraordinary impact it would have on our lives.

And here we are operating under a regulatory structure that was built around a marketplace that has virtually disappeared. Which leads us to today’s FCC Open Meeting.

The FCC is expected to launch a proceeding that has an almost eerie feeling of late-90s “déjà vu all over again.” The Commission is once again looking at whether to reform two subsidy programs whose problems have hung over the communications marketplace for more than a decade: the Universal Service Fund (USF) and Intercarrier Compensation (ICC).

We salute the Commission for recognizing the need to modernize these broken systems. To state the obvious, we will not realize President Obama’s goal of universal broadband, if USF and ICC are not aligned to the realities of today’s innovative technologies and marketplace. Broadband simply will not be made available to some consumers if the government continues to reward and require providers to offer plain old telephone service in the same way those providers have been delivering service for the past 100 years.

It truly is time to re-examine our communications priorities. At AT&T, we think we should have a clear vision of where we are going. Here is what we think the world will look like: we will move the goal of all Americans having universal access to voice service to one where the goal is provide universal access to broadband service. Broadband is and will continue to be an interstate service and the service will not be “split” (or separated if you like) between federal and state jurisdictions.

The PSTN will ultimately go the way of the Betamax, the VHS player and the Walkman and we will understand that that is a good thing. Broadband subsidies will be only for broadband, will be explicit and provided only in areas where broadband would not exist without the subsidy. We will not subsidize different competitors in a market. The regulatory obligations that attach to those subsidies will be explicit as well.

In recent days, the Commission has seen a parade of companies (often regulatory adversaries) including Google, AT&T, NCTA, NTCA, Verizon, Sprint and others urge reform of the broken, non-transparent subsidy programs. The fact that such a disparate group of competitors has come together should be a sign that the time for the Commission to act is now. I think the Chairman’s speech yesterday and the action by the Commission today do a great job of beginning this long overdue journey.

Reprinted from the AT&T Public Policy Blog.