Thursday, September 28, 2006

Deregulation Works

Deregulation works! That is not a headline you are likely to see in any major newspaper. Well, maybe the WSJ would be an exception. But it would be an apt headline for a story recounting the FCC's release of its 11th annual report on the state of competition in the wireless industry.

Since 1993, when Congress largely eliminated federal and state economic regulation of the wireless industry, the American consumer has been served very well by the competition that has been unleashed. The FCC's news release recites the mind-boggling statistics concerning subscriber growth, time spent talking on our cell phones and the number of text messages, and decline (yes, decline) in the per-minute price, and the like. At the end of 2005, there were 213 million subscribers, 50 or so million more than the number of landline subscribers. You can read the statistics in the news release. Or you can just walk outside of your home or office anywhere in America and see people using their mobile devices everywhere--even where you wish they weren't!

FCC Chairman Kevin Martin points out in his statement that 98% of the total U.S. population lives in counties with 3 or more mobile service operators. There is no doubt the competition is robust, and mobile services will increasingly compete with other broadband platforms in the video and Internet market segments.

The mobile services market is a good case study concerning how a technologically-dynamic marketplace can flourish when lawmakers and regulators allow competition to substitute for regulation. All the more reason why it is important not to allow states, as some have been wont to do, to establish a patchwork of different regulations that, in effect, chip away at the 1993 deregulation mandate. In this light, the provision of Senate Commerce Committee bill establishing a national framework that preempts state wireless regulation represents sound communications policy.