Tuesday, August 17, 2010

Is it time to Completely Deregulate the Local Phone Service?

Headlines from the past year…

Almost all of us take for granted much of the services and features that are being incorporated into mobile phone devices at a pace that is dizzying.  Whether you are a iPhone fanatic or Droid disciple, you appreciate the dizzying introduction of apps and other services to your hand held device.  We take for granted features like call forwarding and voice mail as “of course” services.

Have you ever wondered why more is not done with a mainstay of the twentieth century the home phone?  Why is it, for example that our mobile phones become increasingly powerful and sophisticated but at the same time the traditional phone is little different than it was 25 years ago?

This was brought home to me in a personal way recently when I tried to add something as simple as call forwarding to my Verizon home phone.  Currently I subscribe to a Verizon FIOS triple play with phone, internet, and tv in the bundle.  When I inquired about adding call forwarding to my service, I was told, that will be $5.99 extra per month.  $5.99 extra???????  Isn’t there a bundle that offers that I politely inquired.  No was the response.  This is not part of the “package”.  This got me thinking, why in heavens name doesn’t Verizon offer this as a package?

Welcome to the world of regulation.

Let’s compare and contrast what a service provider must do to turn on a feature like “call forwarding” on a mobile device and a traditional land phone.

Traditional Land Line
Because land phones are regulated at both the federal and more completely at the state level, they must prepare and deliver to regulatory boards filings that describe services offered and the list prices that will be charged.  If they want to reduce the price, they must file paperwork.  If they want to offer a discount, they must set forth the specific circumstances in which those discounts would apply.  So a phone company must:
  • prepare documents (not a trivial task),
  • file them with several different state regulators,
  • get approval from each of them
before making any changes to an offer.  All of this must be done within the existing (and outdated) definition of what the phone service is.  That definition makes any significant change to what is offered, including handsets and how the service is delivered, costly and difficult.  Even adding something as simple as “call-forwarding” is something of a sisyphus task.

Mobile Line
Compare that with what must be done to introduce call forwarding in the mobile world.
  • The company builds call forwarding into the network
  • Turns on the capability in the devices
  • Announces it to its customers.
Now you tell me, if you were a phone company.  Where would you invest your resources and concentrate your innovation?  The ultra-regulated world of traditional phone services, where it takes an act of the gods to offer something as simple as call forwarding or mobility where competition drives innovation and services are deployed with minimal regulatory regard?

Our legislators are going regulation crazy!  You know, train wrecks may be fascinating to watch, but ultimately destructive and hurt a bunch of people. If we don’t change, a train wreck is where we are headed.  We must slow this train down before it goes off the rails or we may end up like Harrison Ford in “the Fugitive” running for our lives to avoid a runaway locomotive.

Not only should we not regulate the internet, we should tear down the regulations that hold the traditional land line phones stuck in the twentieth century while the rest of the world zips by.

Let Freedom Ring

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