Op-Ed: Regulatory Reform Necessary for Jobs and Benefits to Consumers

Mario H. Lopez | December 5, 2011 | Opinion
In NJ's telecom sector, red tape and outdated regulations hinder true competition

With so much attention paid to the economy, the daily bombardment of job growth proposals from Washington, Trenton, and the media can seem overwhelming. While most ordinary people are not economists, policy experts, or politicians, New Jerseyans are smart and know when they hear commonsense solutions that will get businesses hiring again. One sensible first step the public can identify with is reform of complex, cumbersome, and outdated government regulations that often hinder economic growth and job creation.

This type of reform is particularly needed within New Jersey’s telecommunications sector, where a modernized system would improve the pro-business environment by sending a strong signal to investors. Thankfully, there is a specific legislative vehicle already in place for this type of transformation. The Marketplace and Consumer Choice Act (or S-2664) has support from consumers and many in New Jersey’s business community.

This legislation will modify the regulation of New Jersey’s telecommunication and cable providers to promote competition for the benefit of consumers, as well as establishing an even playing field among competitors in the marketplace. Under current regulations, traditional phone companies face a litany of duplicative reporting requirements not imposed on competitors in the marketplace, like VoIP and wireless providers. Government enacted these rules decades ago, when traditional phone companies were the only game in town. But now, phone companies compete with cable, wireless, and Internet providers to offer communications services to consumers. Outdated regulations hamper some companies’ ability to compete fairly, and should be reformed to promote a competitive marketplace.

Greater competition puts consumers in charge and increases their buying power. The public will also benefit from increased telecommunication and technology investments, which will improve New Jersey’s economic outlook, spur job growth, and make the state a more attractive place to live and work.

The Marketplace and Consumer Choice Act would support businesses through honest competition and innovation by allowing companies to direct their resources toward the customers instead of directing manpower and countless hours to unnecessary red tape. The regulatory framework currently in place is outdated, complex and has created heavy burdens for New Jersey’s private sector. Current law requires only companies like Verizon, not its competitors, to file tariffs for all services, even those classified by the Board of Public Utilities as competitive. Tariffs are outdated remnants from the days of monopoly phone service and have no place in today’s marketplace flush with competitors. Continuing to require companies to file these unnecessary documents does nothing to advance competition or improve consumer benefits. It’s just requiring paperwork for one provider, but not others. In fact, it gives other companies that do not have such an obligation a competitive advantage, since they can monitor the tariff filings of regulated companies.

These outdated existing regulations have restricted new capital from entering the market and curtailed the implementation of cutting-edge technologies. Establishing new rules to produce a fair and open marketplace can help reverse this trend by boosting investment. Removing the micromanagement of simple business decisions like these, as S-2664 proposes to do, will reallocate resources to benefit consumers statewide. At the same time, New Jersey will be setting a higher bar for consumer protections by giving families and individuals more choices.

Let’s face it, times have changed, the telecommunications industry has evolved immensely and it is in the interest of consumers and taxpayers for regulations to reflect a new direction that promotes have lower costs, more input, and more options.

New Jersey’s regulatory landscape must change so new communication and technology projects can get underway. Healthy competition means providers will fight harder to earn your business and in turn offer lower prices and excellent customer service. The result would get more people back to work, increase consumer choices, and lower prices.