Data communications: where regulators clash with reality

Exponential advances in telecommunications and computer technology are driving the United States and the world into the information age, an age of instantaneous and massive communication all over the world. The rapid pace of new technology has made the old concept of the franchised telephone monopoly obsolete-an obsolescence confirmed and hastened by the 1996 Telecommunications Act. However, the new environment has also made traditional modes of telecommunications regulation obsolete. In this article, the authors argue that, in many key areas, regulators are actually standing in the way of delivery of the information age to many Americans. Traditional regulation has long controlled such key aspects of a regulated telephone company's operations as the introduction of new services and the price at which services must be offered to the public. These regulations, as applied to the last remaining heavily regulated telecommunications firms, the local exchange carriers, have reached the point where they are now counterproductive and anti-investment. Particularly in the world of data communications, where everything is new, regulators should strive to reduce regulatory burdens in order that the market forces which new technologies are unleashing can bring benefits to the entire public.