EDITOR’S VIEWPOINT/Is competition a sin?
Americans have a love/hate relationship with competition. We know that it fuels our free enterprise system, but then we place restrictions on competition, such as in the recent Supreme Court decision that tells cable companies they do not have to let independent Internet providers buy access from them and resell it. Ironically, telephone companies, who also compete with cable companies, are required to open their lines to competition.
As consolation for their competitors getting a break, the nation’s telephone companies must be pleased to see the potential restrictions being placed on another feared competitor, local government. In a bill, whose title — Preserving Innovation in Telecom Act — must have been written by an advertising copywriter, Texas Congressman Pete Sessions wants to keep local and state government from offering “telecommunications, telecommunications services, information services or cable service in any geographic area in which a private entity is already offering a substantially similar service.” At least Sessions, a former Southwest Bell and Bell Labs executive, grandfathered existing government-run systems and approved cities and counties selling services in communities where private businesses do not operate.
Arizona Sen. John McCain sees local government’s involvement in the telecommunications industry differently than his colleague in the House. McCain has sponsored a bill that allows local governments to offer wireless services, even if there are private providers locally. The bill’s name — The Community Broadband Act of 2005 — wasn’t written with the spin of the Sessions bill, but its rationale is compelling. Noting the importance of our country remaining competitive and innovative in telecommunications, McCain says his measure will encourage private business to venture into smaller, under-served markets, possibly even joining with local governments to create wireless networks.
Already, two states have outlawed local governments from competing with private telecommunications companies. In December, Pennsylvania passed a bill that allows private firms to stop cities from creating municipal Wi-Fi networks. Last month, Florida Gov. Jeb Bush signed a similar measure, and two other states — Indiana and Ohio — have bills pending.
Both sides of the discussion justify their positions as helping the telecommunications industry and, ultimately, the consumer. And, both McCain and Sessions say their measures will strengthen private business, although Session’s bill helps private business the old fashioned way: by restricting competition.
Most people say they like competition, but really what people like more than competing is winning, and one way to do that is by deciding who gets to compete. Is competition from government such a threat, or is the telecommunications industry so timid that federal or state legislation is necessary? Is competition a sin, as Standard Oil founder John D. Rockefeller once said? I guess only if the competitor is local government.