The Qwest for Forbearance

On February 20, the FCC granted in part a petition filed by Qwest asking the FCC to "forbear" from applying certain statutory and regulatory requirements relating to the company's provision of "long distance" services. For this modest step in granting regulatory relief, the agency is to be commended. By not applying certain outdated "separate subsidiary" regulations, the Commission's action will allow to Qwest to achieve efficiencies and cost savings from integrating operations that should benefit its customers.

Two observations:

First, doesn't the notion of having a plethora of regulatory requirements based on a distinction between "long distance" and "local" services seem outdated in an era when people increasingly buy buckets of minutes priced irrespective of distance? Not only do the cellular, cable, and VoIP providers sell plans with buckets of "anywhere" minutes, so do the telephone companies. Most people under thirty don't even know what you mean if you say, "I'm going to make a long distance call."

Second, and more fundamentally, the FCC's use of its forbearance authority in this and other instances is welcome. Going forward, it should avail itself of this authority more often. Recall that at the time the 1996 Telecom Act was passed, new Section 10 granting forbearance authority was hailed as one of the most important provisions of the new act. It was thought to be a new important tool for the agency to have as it adapted its decades-old encrusted public utility regulatory regime to the increasingly competitive environment the 1996 Act envisioned. Also recall that the act says the Commission "shall" forbear from applying statutory or regulatory requirements when the statutory requisites relating to consumer welfare and the public interest are met. The duty to forbear is not discretionary.

In other words, in today's rapidly changing and much more competitive marketplace, the Commission should not forbear from doing much more forbearing. I'm confident that is what the Congress that passed the 1996 Act intended, and probably what President Clinton had in mind as well when, signing the bill, he said: "With a stroke of the pen our laws will catch up with the future. We will help create an open marketplace where competition and innovation can move as quick as light."