By Shelia Watson
Contributing Writer

Sen. Jim DeMint, R-S.C., a member of the U.S. Senate Commerce Committee, has introduced the Digital Age Communications Act, which he says will create a communications regulation system that is market-oriented, competition-based and grounded in sound economic principles.

“We can no longer force a modern, dynamic industry to operate on archaic rules that destroy job creation, limit consumer choice and needlessly raise prices,” DeMint said.

“Congress must wake up. These regulations originated when rotary telephones were our only way to communicate. Today cable, phone and wireless offer consumers similar services, but each one is bound by a different set of confusing and burdensome regulations. At a time when communication technologies are exploding and mediums are merging, we must create a system that protects consumers while allowing businesses to thrive.”

The bill, introduced as Congress aims to tackle telecom reform next year, would allow the FCC to make rules that define unfair competition and unfair or deceptive business practices, but it will set limits on those rules.

Under the communications act, the communications industry would be regulated like other businesses to protect consumers and ensure businesses do not engage in unfair competition.

Services that are similar from a consumer’s perspective would be treated equally. For example, phone service, whether offered by a cable, land-line or a wireless company, would have to comply with the same regulations. In addition, cable television franchises would be phased out over four years.

The bill would also require the FCC and the federal-state joint board on Universal Service to reform the Universal Service Program, which provides carriers subsidies to offer telephone and Internet services to schools, libraries and poor rural areas. The bill would make all service providers contribute equally and make the distribution of the funds more efficient, transparent and “technologically neutral,” which would effectively set a limit on USP payments.

The act would allow communications networks to be regulated primarily at the federal level, although the states would play an important role in enforcing federal rules. States would retain the authority to protect consumers and manage public rights-of-way.

Although the FCC would have “exclusive jurisdiction” in most cases, the bill is expected to limit the FCC’s policy-making power over telecommunications and broadband providers.

Telecom and broadband service provider Verizon praised the communications act in a statement following DeMint’s introduction of the bill. For several months, Verizon has called for Congress to limit the FCC’s role to more of an enforcement agency, similar to the Federal Trade Commission’s role in investigating unfair business practices.

A separate draft telecom reform bill currently being debated in the House Energy and Commerce Committee would retain much of the FCC’s current authority. The House bill, advanced by committee chairman Rep. Joe Barton, R-Texas, would streamline the video franchising process for competitors of cable television operators.

In contrast, Sen. DeMint’s bill would phase out cable television franchises over four years, which would clear the way for companies such as Verizon to compete with cable operators.

“Let’s take the shackles off of America’s most exciting industry,” said Sen. DeMint. “This bill will create an environment that encourages innovation and competition. Americans understand that when businesses are allowed to compete, they win. Competition lowers prices, expands choices and gives us our most exciting new technology.”

The timing of the act’s free-market, antitrust approach is critical. Telecom giants SBC and AT&T merged in November, and Verizon is expected to close its acquisition of MCI in the first quarter of 2006.

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