Internet and Deregulation

There is a curios paradox about the way people think about the Telecommunications Act of 1996. Many people in favor of deregulation and competition would say it failed to bring about enough sustainable competition. In other words, it failed. On the other hand, you'd be very hard pressed to find anybody who actually believes their own communications services are in any way worse than they were before the Telecom Act was passed. In most cases, those same people would have a hard time claiming they are spending more money than they used to, for the same basket of services they bought pre-1996.

It is true that many of us are spending as much, or more, than before 1996, but it also is true we are buying lots more services, using more features and devices than before. The obvious way to reconcile those facts is to say that it was the Internet, and applications built on it, that really have lead to better consumer outcomes, for the most part.

Put another way, things got better, even though the Telecom Act failed, for other reasons. Where the Telecom Act attempted to introduce more competition in voice, the Internet was where the locus of innovation was passing. Even if matters had changed further in the direction of what new contestants would have preferred, would that have changed the fundamental direction we are headed?

The "voice" era was ending in any case, with innovation increasingly driven by broadband access and Internet, mobile and Web applications that rely on broadband.

Internet innovation succeeded, even if Telecom Act did not