Utilities: Telecommunications, Energy, and Other Services

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Utilities—such as telecommunications, electricity, natural gas, water, and sewer services—are crucial to health and well-being. People must be able to contact police, fire, medical, and other responders during emergencies; to drink and bathe in affordable, safe water; and to pay a reasonable rate for summer air-conditioning and ample heat in winter. Older Americans particularly need these services, and many find that they eat up a sizable share of their household budget.

Market-oriented change—in the 1990s, telecommunications and electrical utilities sought sweeping reductions in governmental control. Many regulations changed after passage of new laws in 1992 (for the energy industry) and 1996 (for the telecommunications industry), along with actions by federal agencies and state legislatures. Utilities began relying more heavily on market solutions, promising that consumers’ ability to choose among providers would lead to many new benefits.

Robust competition has not developed for all consumers and in all markets for several reasons. Barriers to entry and consolidation have resulted in too few suppliers in some markets to generate much competition in the residential sector. In addition, market-oriented policy reformers have not always confirmed that effective competition exists before eliminating important protections. When large service providers dominate the market, competition may be too weak to give consumers much influence. Eliminating, reducing, or preventing regulation does not in itself produce competitive benefits. Markets must also be transparent; information about products and services must be available and affordable; and abuse of market power and unfair trade practices must be controlled. Moreover, deregulation or industry self-regulation efforts may help only certain customer classes, while possibly harming others. Strong consumer safeguards are therefore essential in both regulated and deregulated markets. We must maintain provisions for universal service, financial assistance to households with low incomes, and affordable, high-quality service for all residential consumers to ensure that all consumers benefit.

Technological change—technological innovation necessitates policies that ensure the delivery of utility services in ways that best accord with the public interest. In recent decades, technological advances have generated an array of new and better services, often leading to profound social and economic benefits. For example, high-speed Internet connectivity facilitates access to health care services, social contacts, employment, education, recreation, entertainment, and many other activities that help older people age successfully. An increasing percentage of consumers are using these technologies and services.

Broadband deployment also has raised consumer privacy concerns. In 2016, the Federal Communications Commission (FCC) passed regulations giving broadband customers greater control over how Internet service providers (ISPs) share their personal information, including what personal information ISPs can share without customers’ affirmative consent.

Consumers’ increasing dependence on Internet access also raises concerns about ISPs’ control over the way content and information is delivered over broadband networks. In 2015, the FCC classified broadband Internet access as a telecommunications service, and as a result the agency prohibited broadband companies from blocking or slowing down internet content delivery. In 2016, the US Court of Appeals for the District of Columbia Circuit upheld the FCC’s ruling. As a result, broadband Internet access providers may not:

  • lock access to legal content, applications, services, or non-harmful devices;
  • “throttle” traffic by impairing or degrading lawful Internet traffic on the basis of content, applications, services, or non-harmful devices; or
  • engage in “paid prioritization,” through which the ISP favors some traffic over other traffic. For example, the ISP may not provide “fast lanes” for the delivery of a particular content provider’s streaming video downloads, whether in exchange for money or other consideration.

Climate change—climate change is one of the nation’s most difficult issues to resolve. State and federal efforts, such as the “Clean Power Plan” proposed by the US Environmental Protection Agency, aim to reduce greenhouse gas emissions. One obstacle is that these mitigation measures require society to start paying today for benefits that will accrue in the future. Such actions raise important questions about how policymakers can best protect the public interest and avoid driving up prices to unaffordable levels, while also heeding climate scientists’ calls for immediate and substantial action. Protecting the public interest necessitates climate change solutions that ensure energy affordability and fairly distribute costs across the entire population.

Found in Utilities: Telecommunications, Energy, and Other Services