1. Why is telecommunications policy important?

Telecommunications technology has undergone tremendous leaps of progress throughout the past century. Samuel Morse first telegraphed a four-word message over a copper wire in 1844. Today, billions of people worldwide converse daily on wireless phones that double as cameras, and they access a library’s worth of data in seconds from home or office via broadband connections.

The social and economic value of this continuous information flow cannot be overestimated. Knowledge is indeed power when applied by commercial firms to precisely gauge real-time market conditions across the globe, or by citizens downloading news and information from diverse sources to improve their lives. Indeed, annual U.S. telecommunications revenues have exceeded $300 billion in recent years, a testament to the demand for voice, data and video transmissions.[1]

This reliance on telecommunications necessitates public policies that promote innovation and ensure network reliability and security. But for all the mind-boggling technicalities of “frequency division multiplexing” and “asynchronous transference,” telecommunications policy need not be complex if guided by time-tested economic principles.

These principles form the basis of the policy recommendations included in this primer. We begin with a plain-language description of common technologies and a condensed history of the industry. These sections are followed by a status report on the telecommunications market and summaries of controlling statutes and regulations. A glossary is also provided, along with links to relevant Web sites.

A greater understanding of telecommunications among lawmakers, the media and the public is sorely needed. Despite the direct impact on the nation, telecommunications policies have largely been crafted by unseen hands in ineffective ways. Consequently, America now trails a number of Asian and European nations in deployment of the most advanced wireless and broadband technologies.[2]

Michigan is a key state in the reform calculus by virtue of its reliance on technology and its sheer economic muscle. The number of high-speed lines statewide increased tenfold in the past four years, from 81,223 in 1999 to 848,837 today — the 11th largest number in the nation.[3] Moreover, the market share of competing service providers in Michigan is exceeded only by New York and Rhode Island.[4]

Yet the degree of penetration of broadband and other advanced telecom applications in even top-ranking states like Michigan still lags that of global frontrunners in Europe, as well as that of many Asian countries, such as Korea, Hong Kong and Singapore. Absent reform, existing telecom policies that inhibit investment and innovation will continue to undermine job creation and economic growth, while inducing businesses to locate abroad.