Back to the Horse and Buggy

October 11, 1994

Someone built a speed bump in the middle of the information superhighway.

It's not clear who the culprit was, but there are plenty of candidates. The effort to bring federal regulation of the rapidly transforming telecommunications industry has been slowed. So, inevitably, will innovation in bringing the fruits of the electronic revolution to the homes of U.S. consumers.

A bill to revise the 60-year-old federal communications law was ,, one of the most thoroughly studied and heavily lobbied measures in this Congress. Just when all of the competing interests seemed finally to have been satisfied, the effort fell apart. Sen. Ernest F. Hollings, chairman of the Commerce Committee, who had been crafting a compromise bill, announced he could not succeed in the closing weeks of this Congress.

Senator Hollings blamed some of the regional Bell telephone companies for welching on an agreement. But the final blow seems to have come from Sen. Robert Dole, the Republican leader, who intervened at the last minute with some non-negotiable changes deemed favorable to the telephone companies. He appears to have been motivated more by partisan politics -- scuttling another bill the Clinton administration could claim as an achievement -- than carrying water for the Baby Bells. And by stalling it until the next Congress, he might pick up more Republican votes for his deregulatory agenda.

The upshot is that the telecommunications industry will have to maintain increasingly swift technological change through a morass of horse-and buggy regulations. At issue is the competition among regional telephone companies, cable system and long-distance communicators. The differences among them are increasingly blurred, since each is technically capable of providing many of the same services.

Their quarrel is over the conditions that would permit them to poach on each other's turf. The Baby Bells are eager to get into long distance service and provide home entertainment. Their competitors want to protect their market share from what they perceive as a behemoth that enjoys the advantage of direct access to almost all customers.

Competition could have benefited the consumer, providing them choice in many services for the first time. Technology and the market place are already redefining the telecommunications industry. Once again Congress has demonstrated its inability to fend off the lobbyists and suppress partisan squabbling in the public interest.

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