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Letter: The real story on telecom deregulation

February 25, 2008 12:00 PM ET

Computerworld - Broadband access wasn't deregulated in 1996, as Robert Mitchell contends ["Keeping a Lid on Broadband," Opinion, Jan. 28]. We didn't get real deregulation until 2005, and it is just now bearing fruit.

The 1996 Telecom Act relaxed rules on long-haul communications and long-distance voice service but re-regulated most last-mile services and broadband technologies. The result was a dramatic expansion of intercity national and international capacity but a relative slowdown in broadband investment. The result was a "fiber glut," where pathetically thin last-mile tributaries could not generate enough data to fill the newly deregulated, capacious core of the network.

But that was the story five to seven years ago. Today, freed from the old restrictions, U.S. broadband build-outs are now booming.

Decisions by the FCC and the courts in 2003, 2005 and 2006 relaxed or eliminated most last-mile broadband regulation. Some work remains at the state utility commission level. But today, Verizon is investing $23 billion in new fiber-to-the-home links. AT&T is spending billions more on fiber-to-the-neighborhood and greenfield FTTH. These networks will offer broadband services between 10 and 50Mbit/sec. Exactly Mitchell's wish.

Cable companies -- whose broadband services were always mostly unregulated and thus gained the broadband lead versus telecom -- will have to respond in kind. As Verizon and AT&T leapfrog cable's broadband speeds of around 6Mbit/sec., cable will have to transfer more and more of its generous network capacity from TV programming to broadband service. Already, we are seeing cable systems offer 15 or even 30Mbit service. Within a year or two, millions of Americans will have access to broadband every bit as good as world leaders Korea and Hong Kong.

We are in the midst of the broadband build-out we've all been waiting for. The prescriptions advocated by Mitchell could once again bring broadband to a screeching halt.

Bret Swanson
Center for Global Innovation
The Progress & Freedom Foundation

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