Hurricane Michael a wake up call on why total dereg of telecom a very bad idea

Harold Feld, senior vice president at consumer interest group Public Knowledge, wrote an insightful blog post on efforts to rebuild telecommunications networks following the destruction of Hurricane Michael. In his post, he connects the FCC’s anti-consumer, deregulatory decisions in the IP transition -- as well as telco deregulation in the state of Florida -- with the failure of wireline companies to promptly return service to customers in Florida following the hurricane:

… I read Federal Communications Commission (FCC) Chairman Ajit Pai’s statement of frustration with the slow pace of restoring communications in the Florida in the wake of Hurricane Michael. Pai explicitly echoes similar sentiments of Florida Governor Rick Scott, that carriers are not moving quickly enough to restore vital communications services. Pai is calling on carriers not to charge customers for October and to allow customers to switch to rival carriers without early termination fees.

What neither Pai nor Scott mention is their own role in creating this sorry state of affairs. Their radical deregulation of the telephone industry, despite the lessons of previous natural disasters such as Hurricane Sandy, guaranteed that providers would chose to cut costs and increase profits rather than invest in hardening networks or emergency preparedness. That is how markets actually work in the real world (as opposed to in the delightful dereg fantasy land dreamed up by hired economists). But rather than take precautions that might annoy or upset powerful special interests, they chose to mock the warnings as the panic of “Chicken Little, Ducky Lucky and Loosey Goosey proclaiming that the sky was falling.”

Now, however, the Chicken Littles come home to roost and, as predicted, private market incentives have not prompted carriers to prepare adequately for a massive natural disaster. This result was not only predictable, it was predicted — and mocked. So now, like Cornelius Fudge, Chairman Pai and Governor Scott find themselves confronted with the disaster scenario they stubbornly refused to believe in or safeguard against. And while I do not expect this to change Pai’s mind, this ought to be a wake up call to the 37 states that have eliminated direct regulatory oversight of their communications industry that they might want to reconsider.

Read the full blog post here.

Link:

Hurricane Michael A Wake Up Call On Why Total Dereg of Telecom A Very Bad Idea (Tales of the Sausage Factory, Oct. 17, 2018)