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The Stack Archive

Telecommuting: telecommunications policy and market factors

Wed 11 Mar 2015

telecommuting-telcos

michael-shearMichael Shear is the President of the Broadband Planning Initiative in Washington DC. Having looked at the background facing proponents of telecommuting and issues of transport and environment, today Michael examines the influence of the telecommunications arena itself on the subject…

One of the most challenging aspects of our rapidly-changing world is the conversation around public policies for information and communications services. The lack of an integrated and holistic policy framework hampers our ability to deal with the hyper or over connected reality caused by the information and communications technologies revolution. Fundamental to this discussion is that the predominant role of government is to preserve and advance the ‘public good’ and must be balanced with our economic values and our understanding of the unique role of telecommunications as infrastructure.

While free, open and competitive markets are prized, the reality is that they rarely exist in perfect form. The past regulatory approach and structure of local PUC’s and FCC oversight has been reduced, leaving many fundamental issues (i.e. availability, quality, pricing, and privacy) unresolved in terms of ‘public good’.

Individuals lack clear policy direction from government in the way of assurance of access, equitable pricing, privacy protections, or acceptable service levels

In the early part of the 20th century competition for telephone services flourished, bringing with it challenges of interconnectivity. Depending upon the carrier providing the service, individuals might not be able to phone neighbors or family if they had a different carrier. Theodore Vale made the argument to the U.S. Congress that the nature of telephone services and its need for standards to allow interconnectivity justified his company, AT&T, to buy up smaller firms and create a more compatible network. In return for the right to purchase competitive firms, AT&T agreed to become a regulated monopoly. The result of this agreement was the passage of the Communications Act of 1934.

From 1934 to 1984, telecommunications services and technologies were essentially delineated as local and long-distance services. In the case of AT&T as the dominant provider in both local and long-distance services, services were regulated by local PUC’s and the FCC respectively. In the interest of stimulating the introduction and use of new technologies and to generate competition, the Justice Department, through the decision of Judge Greene, forced AT&T to separate local and long-distance operations and to divest itself of the local services operations. The decision’s intent of stimulating new technologies and services has certainly occurred. The creation of the Internet, though, was not a consequence of this decision but rather the result of the federal government’s investment and development. De-regulation however, most likely played a major role in the rapid speed of the commercialization of the Internet.

While a large number of companies were created in the post -1984 deregulatory environment, the marketplace essentially ‘collapsed’ from both over-investment and speculation, resulting in a period of consolidation and re-aggregation – perhaps a more normal market arrangement for infrastructure. The drawback is that while new technologies and services were being created and market structures were adjusting, public policy thought and dialogue had all but disappeared.

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The Telecommunications Act of 1996 was the first major legislative and policy enunciation written since the Communications Act of 1934. While the 1934 legislation blessed the regulated monopoly structure for telecommunication services, the 1996 Act legitimized industry de-regulation with the objective of stimulating competition. This most recent legislation was the diminution of government involvement and policy discussions undermining the structural strength of policy formation in a time that the industries, technologies, and services were undergoing tremendous change.

The commercialization of the Internet expanded the nature of electronic communications beyond basic phone services to include data and video and connected services that have never been considered in prior public policy discussions. It is in this current environment that communities and individuals are left without adequate public policy participation or expertise. Evidence of this can be seen in the area of municipal owned networks for ubiquitous internet access.

Some courts and state legislatures have taken steps to restrict and prohibit communities from building and operating their own networks, which may well inhibit their ability to make these communities more competitive in their regions and in the global marketplace. While communities struggle with their role in leveraging telecommunications as an economic tool, individuals lack clear policy direction from government in the way of assurance of access, equitable pricing, privacy protections, or acceptable service levels.

In addition, a new aspect of industry aggregation and consolidation further complicates the complexities of public good and policy formation: the marriage of content and connectivity. While a number of issues arise from this development, network neutrality is, perhaps, the most visible consideration. It is this development in the United States that poses one of the most salient concerns and which is occurring at a time when government involvement, guidance and leadership is, perhaps, not prepared to preserve and advance the public good.

The explosion of information and communications technologies and services across the globe has rapidly shifted jobs abroad. The backwash of these events has been felt throughout every community in the country. Yet communities have been too disadvantaged to use these new technologies in ways that would improve the competitiveness and quality of life in America. The lack of open and educated policy discussions is a critical cause of this disadvantage.

It is important to understand the historic and current events surrounding provisioning of telecommunication services in rural communities. When universal service was the predominant public policy objective for telephone services, telecommunication investments in rural communities were subsidized through the Universal Service Fund, a method of offsetting the higher cost associated with lower density and greater geographic dispersion of customers. With the shift of telephone services to the internet and a diminishment of FCC and circumvention of state public service commissions’ regulatory involvement, the US Congress must wrestle with the difficult problem of determining the government’s role and establishing appropriate mechanisms to support rural broadband infrastructure in the age of the internet.

Telecommunications as Infrastructure

In order to maximize and effectively influence information and communications technologies investments, it is important to recognize the infrastructure character of telecommunications and its unique properties. Broadband is a General Purpose Technology (GPT) and it has been around longer than the internet. Telephone companies used broadband to control, signal, transmit, and bill telephone calls; large enterprise organizations used it to tie together their networks; and cable TV providers used it to bring more channels to the home, all decades before the internet was created. As a GPT, broadband’s functionality may be used to architect new approaches, but the power of the internet has blurred the distinction and overshadowed our basic understanding of broadband technologies independent of its most recent and successful application.

As with any infrastructure, telecommunications is best leveraged when we assess aggregated demands and opportunities. Infrastructure requires economies of scale that are best achieved by integrating the multiple needs of a community rather than pursuing redundant initiatives. In addition, the inherent characteristic of telecommunications infrastructure to disseminate information and connect geographically dispersed users and sources of information requires communities to ascertain collective opportunities to coordinate innovative and advanced telecommunications programs.

The foundations of the internet market and matters of public good and public policy are all in a precipitous state of flux

Broadband technologies and the internet are, perhaps, the most transformative and dramatic manifestations of information and telecommunications technologies to date. And, while these have propelled tremendous upheaval in globalization, little has been done to establish formal creation of community plans. Certainly, some communities have ventured into municipal access activities but, for the most part, this is a ‘if you build it, they will come’ conviction.

The drawback to these approaches is that further investigation and experimentation has been limited in applying innovative methodologies to the issues of economic growth and sustainability in American communities. We must also be aware that the foundations of the internet market and matters of public good and public policy are all in a precipitous state of flux. Additionally, issues regarding affordable high-speed universal access, network neutrality, privacy, and security are significant unresolved concerns.

An integrated and aggressive use of broadband technologies offers communities a unique and powerful competitive advantage to re-engineer local economies, enhance sustainability, and improve quality of life in the information age.


Read the previous article in this series: Telecommuting: transport and environment issues


In the next feature, Michael will examine how security, continuity of operations and emergency prepardeness are key issues in the future of telecommuting

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