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Telecommunications Policy and Universal Access in TexasIn the case of broadband, market concentration has facilitated the deployment of new technology. However, such concentration could have such negative impacts as increased prices, decreased on-line diversity, and retreat from the goal of universal service. Without a strong regulatory regime similar to the one that gave all Americans the right to an affordable phone connection, the degree of monopoly power in the telecommunications industry could have serious negative consequences. Shortly after passage of Deregulation, U.S. Representative Edward Markey, an initial supporter of telecommunications reform, lamented: I know the proverbial Information Superhighway will go forward…but it will be delayed, and it will not go to every neighborhood, and the gatekeepers will shake you down if you want to use the highway. (1) Because of concerns that the market alone will not address issues of access to the Internet and because the 1996 Act largely precludes any federal action to foster competition or ensure that the public interest be served, there has been some intervention into the marketplace at the state and local level. The state of Texas has been an innovator and a leader by pursuing alternate methods of addressing civic issues in the post-deregulation era. The Texas Telecommunications Infrastructure Fund (TIF) was created with the deregulation of the telecommunications industry in Texas in 1995, a year before deregulation at the federal level. TIF was essentially a tradeoff with the telecommunications industry, accepted by industry in exchange for regulatory relief from the government. TIF was created to address statewide issues of civic concern, providing "assistance in the form of grants to ensure that libraries, public schools, rural health care organizations, and colleges and universities are not disadvantaged" (2) by deregulation. Telecommunications carriers were required to pay a portion of their profits, totaling no more than $1.5 billion over 10 years, into the fund. The money is then distributed by an agency set up by the legislation to the civic and educational organizations. (3) Although there was talk of eventually allowing community-based technology organizations to receive TIF funds, this has not occurred. In addition to providing money to non-networked organizations, TIF has been required to "grow demand" for Internet technology in rural and underserved areas where the benefits of the new technology may not be immediately apparent to citizens. This effort, which has led to substantial self-promotion by TIF, serves the dual purpose of relating the very real benefits of technology to people and of aggregating demand for such technology. After the initial investment in infrastructure is made, the cost per customer of providing service in a community decreases as the number of people using technology increases. The aggregation of demand ensures that the marginal cost of providing service to new consumers is quite small. Although raising awareness about the benefits of TIF and Internet access serves an important function, the practice puts the state government in the peculiar position of doing the telecommunication companies' marketing for them. The relationship is certainly beneficial to the telecommunications industry, and particularly to Southwestern Bell, the major industry player in Texas. Further, although the $1.5 billion fund is a substantial sum of money - larger than any similar state or federal technology initiative - the amount pales in comparison to the increase in profits that have followed deregulation. So although TIF has served an important public need, it has been designed and implemented in a way consistent with industry interests. TIF is not a bad piece of legislation, but it simply does not address the conflict between public and private interests that has so often occurred since deregulation in the mid-90's. To a great extent, the provision of universal Internet access has fallen upon more local, decentralized responses, even within the state of Texas. |
More infoTelecom and Federal Deregulation Notes
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