The End of Telephony

By Michael M. Roberts

Sequence: Volume 31, Number 2

Release Date: March/April 1996

As the 20th Century fades and the end of the millennium approaches, we also witness the passing of the telephone - at least the telephone of memory and metaphor. The black and white images of stark poles, glass insulators and copper wires strung across the prairies, knitting a great country together in the days before radio, before television, before satellites.The years when the Bell System was the nation's largest company, its most favored monopoly and the sponsor of the great research laboratory in New Jersey that discovered the transistor and perfected optical transmission.

Instead, by the year 2000, the world of digital bits will have absorbed the telephone business. Dozens of providers, small and large, will vie for bits and pixels and packets. In the home, an Internet Web connection will bring live voice and video images to us from around the world. At work, intranets will link employees in a dozen countries together with video conferences, whiteboards and collaborative authoring tools.

But as the old analog world passes, what of the 120 years of institutionalized order and stability that were erected by Congress and the states to safeguard the public and promote the use of the telephone by everyone? What about "reasonable and affordable" rates and "universal service"?

These regulatory tools are double-edged swords. Their consensus-based processes reward complexity and special interest advocacy. The one-size-fits-all solutions resulting from legislative compromise stifle innovation and deprive consumers of the choices that a competitive market creates. The cross-subsidies buried in regulated tariffs reach their intended beneficiaries only at the cost of helping many who have no need. Perhaps most important, regulatory processes in telecommunications move so slowly that the problems they are designed to correct often vanish before the cure is even administered.

Much of today's telecommunications regulatory apparatus is as out of date as the technology of analog telephony. However, the task of removing government intervention in the market is much more difficult than putting it there in the first place. As but one example, the telecommunications "reform" bill now receiving final Congressional approval runs to more than 300 pages and requires more than 40 separate Federal Communications Commission hearings and rulings.

Having created regulated niches in the telecommunications business, government now finds that many firms occupying those niches have hired lobbyists to protect them while at the same time espousing the principles of free enterprise elsewhere. And the hired guns can be counted on to use every weapon of obfuscation and delay to safeguard their favored positions to the end.

In years past, this telecommunications fight would have been far removed from concerns of the university community. But delay in modernizing the telephone network penalizes many higher education programs. For instance, the redesign of distance education programs to support interactive learning environments is highly dependent upon the creation of a fully digital, broadband means of reaching homes, schools and businesses throughout the country. The ability of libraries to collaboratively address opportunities for making scholarly archives available to the entire educational community requires improvements to Internet bandwidth both nationally and internationally.

So while we are waxing nostalgic about the glory days of the telephone, let's unite that with a determination to reform telecommunications regulation into a system that promotes progress and intervenes in the marketplace only in those few instances where the government genuinely must protect the interests of its citizens.

Michael M. Roberts is vice president of Educom. [email protected]

Take me to the index