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Sunday, December 12, 2004



Inouye sees
chance to regulate
telecommunications

The senator will play a key role
as Congress considers revising
a landmark 1996 law

U.S. Sen. Daniel K. Inouye is expected to be a major player next year when Congress considers rewriting the landmark 1996 Telecommunications Act.

"In the beginning, when cable companies were in their infancy, in order to bring it up we gave them certain breaks. The question now is should we again consider them."

Daniel Inouye
U.S. senator

The complex federal law regulates telephone service, television and radio plus cellular phone service.

Inouye, who as early as 1993 wanted increased federal regulation of cable communications, said last week in Honolulu that he would again bring up that subject.

"In the beginning, when cable companies were in their infancy, in order to bring it up we gave them certain breaks," Inouye told the Star-Bulletin. "The question now is should we again consider them."

Inouye is expected to be the ranking Democrat on the Senate Commerce Committee, chaired by his political ally, Republican U.S. Sen. Ted Stevens of Alaska.

The pair have announced that they will hold a series of six meetings across the country to hear from consumers and members of the communications industry about changes to the Telecommunications Act.

"We are going to begin in January after the inauguration, and continue in February," Inouye said.

The federal law is the basis for regulation of the broadcast, cable, telephone and cellular telephone industries.

Inouye noted that although the telecommunications act was written just eight years ago, there is no mention of the Internet.

Since then the Internet has become a medium for the delivery of telephone service, music and video.

"The 1996 Act is already ancient," Inouye said. "Eight years ago people were not talking about it."

Industry observers are split on how Congress will approach placing federal controls or taxes on the Internet.

Michael Salsbury, partner at the law firm of Chadbourne & Parke, former general counsel of WorldCom and MCI that served as a lobbyists for the telecommunications industry, predicts a major battle between local television broadcasters and cable companies.

But, he added, it is not likely that Congress will want to regulate the Internet.

"Most people in Congress would be resistant to regulating the Internet in any meaningful way, because they fear it would retard development and cost the consumer more," Salsbury said.

President Bush is expected to sign a bill passed last month that extends the ban on Internet taxes for another three years.

If the Internet is not regulated, it is more likely that Congress, with Inouye's prodding, might look at media ownership and how that affects telecommunications.

Inouye last year supported a joint resolution that disapproved of Federal Communications Commission rules allowing media conglomerates to own more television stations and newspapers.

"Now there are people expressing concern, and this will be one of the questions we will be inquiring into," Inouye said.

A new telecommunications act is critical for Hawaii, according to industry analysts such as John Rutledge, chairman of economic advisory firm Rutledge Research, and Marty Plotnick, president of Creative Resources and author of a telecommunications newsletter.

Rutledge, who was an economic advisor to Bush and former President Ronald Reagan, lives part of the year on Maui. He said that Hawaii will become more and more reliant on superior telecommunications.

"We must build the fastest, most reliable network in the world. That is the answer to competitiveness for the U.S.," Rutledge said.

With improved high-speed communications, "students on Molokai and Lanai will be able to get educational services" as efficiently as they can in Honolulu, Rutledge said.

Plotnick said Hawaii can benefit as new communications services open, but there are questions about how they would be regulated.

"Should the Public Utilities Commission regulate Oceanic Cable if they offer phone service over the Internet?" Plotnick asked. "There are critical issues to be addressed."

Rutledge Capital
www.rutledgecapital.com/
Marty Plotnick's CyberZone
cyberzone.pacific-tier.com/
Sen. Daniel Inouye
inouye.senate.gov
Federal Communications Commission
www.fcc.gov
State Public Utilities Commission
www.hawaii.gov/budget/puc/


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