Telecom Reform: DeMint Does Daca

Supporters of telecom reform got an unexpected Christmas present yesterday as Sen. Jim DeMint, a Republican from South Carolina, introduced the “Digital Age Communication Act.” If the name sounds familiar, it should–DACA is the product of a year-long effort by the Progress and Freedom Foundation to develop a free-market framework for telecom reform. DeMint’s proposal takes the parts of the PFF plan completed to date–including proposals for regulation and for universal service subsidies–and puts them into legislation.

DACA represents the work of dozens of telecom experts from academia and the think-tank world, serving on working groups covering all aspects of telecommunications policy. (I was pleased to be able to serve on two of those groups). While not all of the groups have completed their work, the product so far provides a market-oriented, yet practical, framework for reform. The core of the plan is a new approach to regulation. Instead of defining regulation by type of service (what PFF’s Randy May calls “technocentric” regulation) rules are applied based on the presence or absence of competition, using an “unfair competition” test borrowed from the Federal Trade Commission Act. Other sections of DACA would replace current universal subsidies with block grants to the states, and limit state and local regulation of telecom and cable TV services.

No one will agree with all aspects of the plan. In many areas, it could have gone further. Rather than provide “unfair competition” authority to the FCC, I would have preferred to recognize that the FTC already has such rules, apply them to telecom, and send everybody home. That said, the DACA approach is the best entrant so far in Congress’ telecom sweepstakes, showing that free-market concepts can be incorporated into practical proposals. Kudos to PFF and Sen. DeMint for taking the telecom debate a big step forward.

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