The Era of Commerce and Content Calls for a Communications Act Reboot

The Era of Commerce and Content Calls for a Communications Act Reboot

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In 1996, people pronounced the word “content” with emphasis on the first syllable.  When the word showed up anywhere close to the word “telephone” it was usually in the context of whether you were content with the service provided by your local telephone service provider.  “Commerce” was like the word “sport”; only something Mitt Romney would say or mentioned only when talking about your local chamber of commerce.  Putting the letter “e” in front of commerce was as far away from the average person’s mind as Alpha Centauri.  We were still getting used to having to dial an area code just to make a call across the street.

This was the atmosphere within which the Communications Act of 1934 was amended in 1996.  In Florida, where I worked for the state’s public service commission at the time, there were hundreds of companies reselling long distance services.  Cable companies, acting as alternative access vendors providing bypass services for larger corporate clients, were chomping at the bit to enter, along with traditional long line carriers, the local telephone markets.  The Florida legislature was a bit ahead of Congress, having re-written in 1995 its telecommunications statutes to accommodate the growing amount of communications competition and choice in the Sunshine State.

For Florida and the rest of the country it was make way for competition, give the consumer choice, and leave them content.  “Content” in the 21st century has a different meaning not only in terms of which syllable is emphasized but in how our communications networks are used.  While consumer choice and competition remain stenciled in stone buzz words by grassroots advocates and policy makers alike, commerce and content are playing an increasingly important role.  It’s no longer about whether a company provides long distance voice services vs. local voice services, versus video distribution.  Local telephone companies of the 1990s have become broadband providers of the 21st century with telephone service reduced to just another app on your wired or wireless communications devices.

As I pointed out recently in written comments to the U.S. House Committee on Energy and Commerce, today’s wired and wireless broadband networks are transforming society and facilitating the movement of content and commerce.  When was the last time you called a ticket agent to reserve a flight?  Have you physically been to a book store lately?  Were you among the millions that saw season 2 of “House of Cards” on Netflix?  Just today, the U.S. Department of Commerce released fourth quarter 2013 estimates for retail e-commerce sales.  Sales amounted to $69.2 billion, an increase of 3.4% over third quarter 2013 e-commerce retail sales.  In addition, fourth quarter 2013 e-commerce sales increased over fourth quarter 2012 e-commerce sales by approximately 16%.  The internet has transformed traditional legacy communications into another avenue where traditional brick and mortar retailers and new online only entrants can ply their wares to consumers across the country.

Not only are Americans ordering books and airline tickets, they are watching an increasing amount of online video content.  Pew Research reports that video sharing sites such as YouTube have been the driving force behind an increasing number of adults who post and watch videos online.  The amount of American adult internet users who post or watch videos online has gone from 19% in 2009 to 31% in 2013.

And according to an AdWeek report, online advertising revenues which continue to increase, amount to $20.1 billion dollars in the first half of 2013, a 19% increase over the same period a year prior.

Given what is now transmitted over broadband networks and the ability for entrepreneurs to monetize these goods and services, it’s safe to say that this is no longer your grandmother’s communications infrastructure anymore.  A regulatory structure centered on voice services will no longer work because it will mean policy focusing on the wrong areas.  A modern Communications Act must create a framework that leaves unimpeded the growth we are seeing today in e-commerce, online advertising, and online content creation and distribution.

Because of convergence between services and networks and the emphasis on commerce, distinctions between telecommunications and information services are no longer relevant.  Broadband has incorporated voice, data, text, and video due to the synergies and interoperability of internet protocol.  If Congress must use an applicable title to describe today’s services in a reboot of the Communications Act, the nomenclature should be information services, because that is the product that broadband facilitates through the conduit of commerce.

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