May 27, 2005
HB789 Senate debate highlights
For SaveMuniWireless, the highlight of the debate was something that didn't happen -- no effort to add back the ban on city-supported high-speed internet.
There were moments of leadership from Senator Fraser and Senator Estes that stood out, showing insight into the industry dynamic that is driving today's legislative battles.
In his introduction, Senator Fraser compared the deregulation of telecom and electricity. Since deregulation, more electricity customers have switched to competitive providers than phone customers. Fraser described the difference: electric deregulation in Texas forced the utility monopolies split the business between transmission lines and electric service. By contrast, in the telecom market, the deregulation did not require the telecom monopolies to divest the wires.
In law and business, we're seeing the outcome of this choice -- incumbent behemoths trying to use their control over the wires to retain dominance in services. It's as if road construction companies were able to control the cars we drove.
The proposed municipal network ban is one symptom of this monopolistic urge. The incumbents are trying to keep cities from stepping in to jumpstart markets that the incumbents have abandoned. "If we can't provide service, nobody can."
Another symptom of the monopolistic urge: some internet service providers have started to block third-party internet telephony services.
Senator Estes introduced a concise and far-sighted amendment to HB789 that bans network providers from blocking third party services. The amendment does not ban optional filtering services.
As the incumbent phone and cable companies roll out more bundled internet, telephone, video, and other services, it will be increasingly tempting for them to use their control over the wire to start to assert control over the free market for third-party internet services.
This wise amendment will help to preserve the innovative free market for third-party internet services.
We hope these elements of good public policy live through the conference committee process. We hope the Texas legislature supports policy in favor of a free, competitive market in internet services. We hope that the Texas legislature does not simply see its job, at the end of the day, to give SBC everything it wants, and allow it to use its control over the wires to protect market dominance.Posted by alevin at May 27, 2005 09:17 AM