Telecom reform about POTS, PANS

A big change is developing in the debate about telecommunications reform. News reports during the first two years following the Telecommunications Act of 1996 were dominated by stories about mega-mergers, consumers as road kill on the information superhighway, lots of name-calling between the computer and telecommunications industries, dog fights between the local exchange telephone companies (e.g., the Baby Bells) and the long-distance carriers (e.g., AT&T and MCI) and finger-pointing born of confusion and uncertainty between the regulators and the regulated industries.

Now, public discussion and private agendas seem to be shifting to truly important issues, such as the need for high-speed communications networks and universal service to make sure that every household and small business, both urban and rural, both East and West, have affordable, high speed access to the Internet.

This is a healthy development. It is happening, in part, because policy makers and business leaders increasingly understand that telecom reform is not simply about new and cheaper voice communications. Instead, telecom reform is about a whole new way of using telephone lines and wireless communications systems to live, work, and play. Put another way, true telecom reform has a lot more to do with PANS (the Internet and all the "pretty amazing new stuff" for commerce, education, entertainment and home management) than with POTS ("plain old telephone service").

Three important trends contribute to this change in the debate. First, the spread of PCs, now found in about 45 percent of American households, has stalled. There are many reasons for this , but two stand out: PCs are too hard to use and new "killer" applications that compel people to buy a computer (as the spreadsheet did for an earlier generation of PC users) have not been forthcoming.

Second, people now understand that the future of computing is "network computing," where the computer is used primarily as a communications device linked up to the Internet. Viewed this way, the PC becomes a "telecomputer" with a huge potential to extend the reach of the ordinary citizen as well as every small and mid-sized businesses. However, consumer frustration with snail-paced telecomputing is wide-spread. Ask anyone who has called up a Web site, which may require 15-30 seconds to "paint" the home page on the video screen. That's why many call the "World Wide Web" the "World Wide Wait." Result: People are beginning to understand that telecomputing growth requires massive investments in communications networks to bring them up to speed, i.e., to the speeds required by high-speed transmission and full-motion video that are required for video teleconferencing, telemedicine, entertainment and other new applications that can be provided as soon as high-speed transport is available.

Third, on the telephone side there is the "copper renaissance" i.e., new developments in electronic technologies that now make it possible to provide high-speed communications services over the existing copper infrastructure. Result: It is now possible to transform the copper "straw" that links the home or small business to the Internet into a "fire hose" with a lot more capacity to move digits. One such technology, dubbed ADSL, which is now being deployed in Phoenix, Ariz., permits low-cost Internet access speeds that are 25 times faster than a 33.6-kbs modem that many use today to surf the Web.

Result: Regulators and business leaders are beginning to understand that POTS and PANS are related and that if regulations kill or depress incentives to invest in the infrastructure for POTS, then regulators will delay the convenience, job-creating and other economic development benefits of PANS, an unacceptable outcome.