New Jersey Telecom “Reform” Maintains and Expands Status Quo

Following a stalled effort to deregulate telecom services in New Jersey earlier this year, this week lawmakers are touting a new bill that would continue government’s intrusive role in phone and video marketplace under the guise of reform.

The Telecommunications-Cable Television Deregulation Ensuring Consumer Protection Act (S. 3062) contains little in the way of deregulation at all, instead reaffirming and expanding the role of the Board of Public Utilities. The Board would continue to set rates, tariffs, and terms and conditions for services, in addition to creating higher regulatory barriers to entry for new competitors in the market.

S. 3062 will also force “carrier of last resort” obligations onto providers, meaning some companies will be forced to maintain costly phone and video networks in areas with other, stronger competition and potentially no customers – costs that will be born by consumers in the form of higher prices. Worse, the bill expands the role of the Board from regulating simply “noncompetitive” services to even ones that face substantial competition in the market.

The measure stands in direct contrast to true deregulatory reform that was introduced earlier this year in the Market Competition and Consumer Choice Act (S. 2664). This measure would level the playing field amongst service providers by removing a number of regulatory burdens, thereby allowing greater competition in the market, lowering consumer prices, and removing unnecessary government involvement. The bill passed the New Jersey Assembly earlier this year on a strong, bipartisan 66-7 vote, but failed in the Senate.

If New Jersey wants to expand the broadband, phone and video market to greater competition, it must come through true deregulatory reform like that contained in S. 2664 that lowers barriers to entry. Measures like the newly introduced S. 3062 only serve to maintain (indeed, expand) the status quo under the false guise of reform.