The United States – the largest and most dynamic economy in the world – should be at the cutting edge of communications. Instead, we are falling behind other countries; the best jobs in the industry are being destroyed; and many Americans are still waiting to experience the information revolution.
Today, the United States ranks 16th in the world in broadband penetration, behind Canada, Japan, and Sweden. The deployment of advanced networks is uneven, leaving some parts of the country and population unable to participate in the information economy. The industry continues to hemorrhage good-paying jobs. Over the past five years, telecommunications employment dropped by 325,000, according to the Bureau of Labor Statistics.
Universal, affordable access to truly high-speed communications networks is essential to economic growth, job creation, and an improved quality of life. Advanced communications networks create opportunities to increase democratic and civic participation, improve delivery of health care, education, job training, public safety, as well as other vital public services.
To maintain world leadership, the U.S. must adopt a national broadband policy, one that is at least as ambitious as initiatives in Japan or Korea that aim to connect every business and household to high-speed networks delivering data at speeds of 100 megabytes per second by 2010. To this end, CWA joins with 2.5 million telecommunications workers around the globe to support universal, affordable service; quality service and quality jobs; and responsible corporate practices in the industry.
New Technologies Destabilize Regulatory Framework
New technologies have been driving competition in the telecommunications market, destabilizing the old regulatory framework. Wireless, e-mail, and instant messaging are alternatives to wireline telephone service, with Internet telephony (Voice Over the Internet Protocol, or VoIP) emerging as a transformational force. According to the Federal Communications Commission, there are more wireless subscribers today than customers of incumbent telephone companies. Already, seven percent of Americans have "cut the cord" and gone entirely wireless, with the number expected to grow to 25 percent of all telephone customers by 2010.
Currently, about three million households subscribe to Internet telephony. Analysts predict 18 million – or 10 percent of all U.S. households – will use the Internet to make all their phone calls in just three years. With VoIP, cable companies and independent carriers compete directly with phone companies. Yet, traditional wireline carriers are required to pay universal service contributions, telecommunications taxes, and are subject to requirements to provide access to the disabled – all regulatory requirements that VoIP carriers do not have.
Unequal regulation imposes costs on some carriers and not others, distorts the market, and undermines our long-standing commitment to universal service. As more customers (those at the high-end who have broadband access) migrate to VoIP, a smaller base funds universal service. The Universal Service Fund subsidizes telephone service in high-cost rural areas and for low-income households. It also subsidizes Internet access in schools, libraries, and rural health facilities.
Public policy must step in where the private market fails to deliver. We must ensure that companies do not abandon service to rural and outlying suburban areas even as competition thrives in the business and high-end urban communities.
Public Policy is Destroying Good Jobs
Regulatory policies that tilt competitive advantage toward cable providers and independent VoIP companies contribute to the destruction of the best jobs in the telecommunications sector. As a result of the 50-year collective bargaining relationship at the Bell companies and other incumbent local telephone companies, workers at these companies earn significantly more and receive substantially more training than employees in the largely non-union cable industry. The U.S. must create a level playing field for all players in the voice and data communications markets to support the creation of good jobs for working Americans in these critical high-tech industries.
Breaking Up the Cable Monopoly
While competition is thriving in voice and data services, cable companies continue to monopolize the video market. As a result, cable prices have skyrocketed at three times the rate of inflation. Telephone companies are now investing billions of dollars to build-out their fiber networks to provide video. These new competitors in the video marketplace have the potential to constrain video price escalation and should be encouraged. Additionally, policymakers must close the current loophole in the program carriage rules that allow cable companies to deny program access to other carriers if the programming is distributed through fiber instead of over the air.
A Telecom Policy for the Future
It is time to update the rules in the telecommunications sector so as to encourage investment in new broadband technologies; protect and advance quality, affordable universal service; and create good jobs in the industry and throughout the economy.
CWA recommends that Congress include the following provisions in any telecom reform legislation.
Strong Consumer Protections. Lawmakers should require strong consumer protections on all carriers of voice service including traditional wireline, wireless and VoIP/cable telephony providers. Such protections should include, at a minimum: public safety requirements to provide 911 and E911 services; requirements to ensure that customers with disabilities receive services that render telecommunications accessible; protections against slamming, cramming, and other unfair and deceptive practices; contract disclosures including accuracy in billing and privacy protections; and requirements to provide advance notice of termination of service. Congress should consider the historic and effective role of the states in consumer protection, and set federal minimum standards upon which states may choose to build.
High Quality Services. Congress should maintain and strengthen service quality standards, applicable to all carriers. To enhance consumer choice in a competitive environment, Congress should require broadband providers to report actual speed and reliability of broadband service, similar to airlines' on-time reporting and auto manufacturers' fuel efficiency information. Legislators should require carriers to provide customers free access to domestic telephone service centers to respond to their inquiries. Finally, because high quality service depends on a highly-trained, well-compensated, career workforce, Congress should support policies that encourage these employment practices.
Protect Basic Telephone and Video Rates. Congress should ensure that all consumers have access to basic telephone service and basic tier video service at just and reasonable rates and that the service is provided in a safe and reasonable manner. Deregulation of rates, terms, or conditions should include a provision that would permit re-regulation if market conditions fail to protect consumers. The 1996 Telecommunications Act includes this provision for the wireless industry. Finally, cable programming should be available on an a la carte basis, consistent with policies to encourage development of diverse and minority-owned programming.
Video Franchising. Congress should encourage new competitors in the video marketplace while at the same time promoting quality and universal broadband networks. Legislation to facilitate video entry by new competitors should include the following requirements: municipalities should retain jurisdiction over rights-of-way; all video providers should pay an equivalent franchise fee to municipalities; all video providers should provide public, education, and government (PEG) channels; all video providers should be subject to consumer protections and service standards; and all video providers should abide by anti-redlining provisions, and commit to reasonable, phased-in build-out throughout their service area footprint.
Universal Service. All Americans should have access to affordable, quality telephone service and high-speed Internet networks and service. It is time for Congress to update the universal service system to support broadband networks and services in addition to voice service in high-cost rural areas and for low-income households. Universal service support must continue to fund advanced services in schools, libraries, rural health centers, and should be available to community technology centers. The current universal service distribution methodology should be amended to ensure that large carriers are eligible for support in the rural high-cost areas that they serve. All voice and data carriers, including IP-enabled service providers, must contribute in an equitable manner to universal service support. Finally, companies that violate U.S. securities laws or labor laws should not be eligible for universal service or other public supports.
Advanced Networks and Services. Congress should establish a national goal for truly high-speed broadband deployment of 25 to 100 megabytes per second that is accessible and affordable to everyone by 2010. In addition to expansion of universal service subsidies for broadband, Congress should adopt additional programs to accelerate deployment of advanced networks to underserved areas and low-income populations. Such programs include loans, subsidies, tax credits, and federally supported demonstration projects. Lawmakers should provide funding to enable police, fire, emergency personnel, and other first responders to have access to high-speed networks. Congress should also explore ways to use public health, education, job training, and low-income housing dollars to support broadband access to deliver more efficiently these publicly- funded programs. Federal and state Broadband Commissions should be established to facilitate public/private partnerships for the purpose of accelerating affordable, quality broadband access.
Unbundling, Interconnection, and Open Networks. Carriers must have a duty to negotiate interconnection and to offer services to other carriers, with prohibitions against unreasonable discrimination in rates, terms, conditions, and practices. Regulators should establish a dispute resolution procedure. To ensure an open Internet, consumers should be able to access any legal content, services, and applications they want on the Internet; to run any application or attach any equipment so long as they do not harm the network; and to receive meaningful information about their broadband service plans, including information about speed and reliability. Broadband service providers must be able to recover the cost of network expansion.
Media Ownership. Since the foundation of a strong democracy rests on media diversity, we must protect and strengthen our media ownership rules. There must be limits on how much one media company can own in a single market, and we must maintain the prohibition against common ownership of a newspaper and TV station in the same community.
For further information, contact:
Debbie Goldman, Research Economist
(202) 434-1194
dgoldman@cwa-union.org
or
Lou Gerber, Legislative Director
(202) 434-1315
lgerber@cwa-union.org
www.cwa.governmentaffairs.org
