If only the wireless industry could have the Internet’s deal. Oh, what a wonderful world it would
be!
The Internet, this brave new interior world of pixeled 1’s and 0’s that lives in virtual defiance of time, distance,
space and national sovereignty, is being coddled by government and exploited by Wall Street in unprecedented fashion
for arguably all the right-even if not completely understood-reasons.
What a sweet deal it is for the Net indeed,
being shielded from local, state and federal taxes for at least the next few years. And nary a regulation in sight.
All
the while, startup Net firms-like GeoCities (with millions of dollars in annual revenue to match millions in losses) sells
for just a few billion less than what Ford will pay for rock solid Volvo. Go figure.
Some explain Internet bullishness
in terms of regulatory arbitrage. Telephony, commerce, entertainment and other services are inexpensively offered-and
gobbled up-in an unregulated Internet environment that others can only dream about. For nimble ISP’s, that’s good
arbitrage.
In fact, regulatory arbitrage is a major challenge for the Federal Communications Commission these
days.
In the late 1980s and early 1990s, mobile phone and paging sectors cried foul when they saw others providing
like services under a different regulatory regime free of state and federal common carrier oversight. Regulatory parity
was the catch-phrase back then. After a lot of industry lobbying, Congress fixed the regulatory asymmetry in
1993.
Today, commercial wireless carriers are not so keen on regulatory parity as practiced by the FCC and
wouldn’t mind seeing some iteration of regulatory arbitrage return.
The competitive wireless industry argues that,
like the Internet, theirs is a relatively nascent industry of revolutionary proportion. But, unlike the Internet, wireless
laments being saddled with common carrier regulations better suited for monopoly Baby Bells.
On the surface, the
wireless argument smacks of hypocrisy. But on closer inspection, it screams legitimate. Congress in the 1996 telecom
act purposefully factored forbearance into the equation, realizing flexible deregulation was necessary to sustain as well
as to foster competition. Thus, the FCC has some unfinished business with wireless deregulation.
For policy
makers, it means pushing the edge of the envelope to the extent allowed by Congress and antitrust law.
For the
wireless industry, it means having the courage to support efforts by FCC Chairman Bill Kennard to make WLL a
serious competitive threat.
For the American consumer, if it’s done right, it means CHOICE.
