Currently, CLECs are afforded access to incumbent carriers' TDM-based networks at reduced government-regulated rates, pursuant to the 1996 Telecommunications Act. Such favorable treatment was intended to give new entrants a running start, a base upon which they might invest in their own networks and build out competing infrastructure. Indeed, policy makers' explicit goal at the time was to create more robust competition in the telecommunications marketplace for both residential and business voice services. It was thought that by allowing the competitors to use the networks of incumbents and to pay a deeply discounted rate for network access, so-called TELRIC pricing, CLECs would rapidly acquire customers, enjoy revenues and soon be able to build their own infrastructures. It hasn't quite worked out as Congress intended. Unfortunately, too few CLECs actually deployed competitive networks of their own, preferring instead to leverage their rate-regulated access to Incumbent Local Exchange Carrier (ILEC) infrastructure while targeting mostly business customers with lower-cost alternatives enabled by lower overhead. Residential consumers rarely receive any benefit from the competitive services most CLECs offer. Easy profits if you can get them, but hardly rules to encourage deployment of upgraded, competitive broadband networks.
Many of these CLECs understandably fear the impact of the IP transition on their own legacy businesses, especially those companies predicated on regulatory arbitrage. Other supporters of legacy rules worry whether upgraded networks will confuse consumers or change services that some prefer just the way they are and have always been. Yet fear of the future is not a sound basis for public policy, and it is obviously not the role of the Federal Communications Commission (FCC) to protect the business model of specific companies, especially those that have been on notice for more than 17 years that they needed to invest in their own facilities and connections. As with government, the ability of businesses to invest is not unlimited. When demanding investment in redundant copper networks to preserve the status quo for an ever-shrinking minority of consumers, policy makers directly rob investment from faster broadband networks that serve the ever-growing majority of consumers. That's the wrong choice. Today's broadband marketplace is hyper-competitive, rapidly innovating and most enabled by less regulation and a lighter regulatory approach to advance the public interest and best serve consumers. It's clear that outmoded telecommunications regulations designed in the pre-broadband, pre-smart phone era no longer advance America's future. Bruce Mehlman is co-chairman of the Internet Innovation Alliance and served as U.S. Assistant Secretary of Commerce for Technology Policy from 2001-2003.