Competition Needs Definition, Regulation, not Fewer Rules, NARUC Told

Define competition carefully and be sure products and services are available in the areas where consumers want to buy them, speakers said on a panel at NARUC's meeting in Washington. The panel was a result of a resolution at the last meeting in Austin in November (see 1511090033). While some were certain Monday that regulators won't need to step in if there's competition, others said that shouldn’t be how regulators work -- that a market has a couple of options doesn’t mean regulation isn't needed.

Much has changed over the past 20 years, but playing field isn't level, said Nebraska Public Service Commissioner Crystal Rhoades. There’s competition, but it’s disorganized and there are a lot of problems with how the term has been applied, she said. Consumers need to be protected so they aren’t being taken advantage of, she said. While in some cases, competition will help alleviate some of the need for regulation, it doesn’t solve the problem completely, she said. Regulators can't protect consumers if there are no rules, Rhoades said. “There clearly are different types of rules for different providers,” she said. “We ought to have rules for everybody rather than those that currently have rules are going to be exempted because … you still need some type of structure and framework by which you protect consumers. If everybody is doing the same thing, you’re not making sure the consumers are protected.”

Telecom has moved from a natural monopoly and regulated rates to a market that relies, where possible, on competition, said Harold Feld, Public Knowledge senior vice president. But the pressures that tend to move the market toward concentration haven't gone away, he said. The way this system works makes the question of competition very confusing, Feld said: “If you ask a consumer generally, in the world do they have a lot of competition for their broadband provider, they’ll tell you no. They’ll tell you they have a duopoly.” So when regulators look at what competition is, they need to ask questions: Do consumers have lots of different choices in different markets? And assuming that exists, how do regulators make sure that continues, because it’s a natural trend for telecom services to go back to monopolies, Feld said. “You can’t just walk away and assume mission accomplished.”

In the conversation about competition among telecom services, don't forget small- and medium-size businesses, said Angie Kronenberg, Incompas general counsel. It’s critical for regulators to remember it isn’t easy for all competitors to build in some underserved and unserved areas, she said. There isn’t always an economic benefit for those regions, and where there isn’t it’s important for regulators do their part to make sure there’s a sufficient wholesale market, Kronenberg said. “When there isn’t an economic case to do so, you need to be able to purchase -- at reasonable rates for reasonable terms and conditions -- the access to customer. That is what’s ultimately going to provide the retail competition.”

Competition should be defined from the consumer perspective, but once there's a working definition for competition, providers need to be defined, said John Jones, CenturyLink senior vice president- policy and government relations. The consumer should be the one to define what a provider is, he said. In most markets, it’s a lopsided duopoly, Jones said. But consumers are driving that, he said. Even in the most rural areas, Jones said, there is choice.