January 16, 2008

Dial Victory

The Bredesen administration has just taken sides in the legislative battle between the cable industry and AT&T. Bredesen's communications director is leaving to join a lobbying firm that represents AT&T, according to NashvillePost.com, and fellow Democrat House Speaker Jimmy Naifeh's wife, lobbyist Betty Anderson, is also now lobbying for a consultant to AT&T, according to the Nashville Scene.

Update: The AT&T/cable battle involves AT&T's desire to be allowed to offer bundled telecom services including phone, Internet and television service on a statewide basis rather than negotiating agreements with local governments the way the cable TV industry did. (To oversimplify, cable had to negotiate such agreements with local governments in order to be allowed to run wires along public right-of-ways. The phone companies, on the other hand, already have their wire networks in place.)

The ultimate goal of the federal Telecommunications Act of 1996 was to increase competition, to let anyone enter any communications business and to let any communications business compete in any market against any other.

The law wasn't perfect, but ever since it passed we've seen an explosion in competition and in technological innovation in telecommunications and television services. You can't watch TV for more than a few minutes and not see commercials for telephone service via cable, Internet service via satellites, telelphone service over the Internet, and television on your mobile device.

Yesterday, I watched the second episode of a new Fox drama (Terminator: The Sarah Connor Chonicles, it's quite good!) that I downloaded via iTunes to my laptop over DSL service provided the phone company. Is that television, telephone or Internet service? Answer: All three. The lines are blurred and that's a good thing.

The cable industry doesn't want AT&T to be able to do statewide what it had to do one local market at a time, and they're lobbying the legislature on that issue. You can't blame them, of course - they have a business to protect.

Me? I'm for whatever increases competition and reduces the role of government - any government - in deciding what I can buy and who can sell it to me and what price they can charge. While I can empathize with those who think local control is the most important aspect of this complex debate, ultimately free-market economics that shifts control to the consumer ought to be the goal. If we truly are a government "of the people, by the people and for the people," the ultimate "local control" should be the individual.

Decreased government involvement and increased competition always leads to better things for consumers - better service, lower prices, more diverse product offerings, etc. Airline deregulation led to more cities having more service, more airlines, and the rise of discounters like Southwest. It also made flying much more affordable, allowing more people to travel for pleasure or business - a boon to both the tourism industry and the economy. (I know of one Nashville business that based its decisions on what new markets to enter on what markets were served by Southwest, because their business required a lot of travel and it was cheaper to travel to and from cities served by Southwest compared to cities not served by Southwest. Without airline deregulation, I doubt that company would have grown nearly as large as it did.)

There's no reason not to believe that increasing competition in the telecom/internet/phone sector in Tennessee would not likewise be beneficial to consumers and businesses.

Free-market economics is a core principle and philosophy for conservatives, libertarians and Republicans. To the extent that Democrats side with free-market principles and consumer choice in any such battle, I have no criticism.