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Leslie Bonacum
Neil Allen

Technology Fostering Competition In Communications Market, But Will Regulatory Policies Get In The Way?

Regulation Designed for Telecom’s Monopoly and Voice Past May Impede Progress in its Open Systems and Data Future

(RIVERWOODS, ILL., March 24, 1999) – Driven by new technology and consumer demand, the telecommunications market is quickly moving from a predominantly voice-based model to an open systems, data model. This open systems model will result in increased competition and new forms of communication that provide added value to customers. However, whether it is allowed to take shape depends in large part on whether regulatory policies foster, rather than frustrate, innovation, according to an article in the March/April issue of CCH Power and Telecom Law, a bimonthly journal published by CCH INCORPORATED.

"Major changes are occurring in the technology, and the way in which it is used, that will fundamentally alter the telecommunications landscape of the future," said Leonard J. Kennedy, co-author of "The Impact of Regulatory Policy on Technologies that Enable Open Systems and Telecommunications" article and a partner in the law firm of Dow, Lohnes & Alberston, Washington, DC.

However, he warns, "Possibly the largest threat to the rollout of these advanced services is the dead hand of regulation and a regulatory system that impedes progress. The industry should be moving toward an open systems model that establishes new carriers as unregulated providers. Yet, Congress and the FCC (Federal Communications Commission) may be moving in the opposite direction, toward regulation."

The CCH Power and Telecom Law article outlines where the FCC’s current thoughts are on key regulatory initiatives that affect competition in the introduction of emerging services, such as pricing, interconnection and collocation. Two particularly pivotal regulatory initiatives discussed concern policies relating to universal service obligations and those concerning the rollout of advanced services.

Kennedy details how regulations designed for the telecommunications market of the past can’t apply to its future. For example, the author notes that the voice-based industry, by regulatory policy, divided the network between local exchanges and Local Access and Transport Areas (LATAs), and any technological improvements to the network were controlled by incumbents.

The open systems market of the future is vastly different, however. "In the 'any distance world' of the next-generation telcos, regulatory definitions that segment local exchanges or LATA have no place," said Kennedy. "Regulations that delay the introduction of advanced technologies may rob customers of a variety of new services or lower prices."

CCH Power and Telecom Law, established in 1998, is designed to anticipate developments in the complex legal fields of telecommunications and power with insightful analysis by leading lawyers, economists and executives engaged in these industries.


CCH INCORPORATED, headquartered in Riverwoods, Ill., was founded in 1913 and has served four generations of business professionals and their clients. The company produces more than 700 electronic and print products for the tax, legal, securities, human resources, health care and small business markets. CCH is a wholly owned subsidiary of Wolters Kluwer U.S. The CCH web site can be accessed at

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Editors Note: Leonard J. Kennedy, the article’s co-author, is available for interviews. Complimentary subscriptions of CCH Power and Telecom Law are available to qualified reporters covering the telecommunications and power industries. For interviews or a complimentary subscription, please contact Mary Dale Walters at 847-267-2038 or


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