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1 Alicia Hansen, Telecommunications Deregulation in Texas Promises Increased Competition, Innovation and Efficiency 1 (2005)

handle is hein.taxfoundation/ffedxz0001 and id is 1 raw text is: FOUNDATION December 6, 2005 Telecommunications Deregulation in Texas Promises Increased Competition, Innovation and Efficiency by Alicia Hansen In September 2005 the Texas legislature passed sweeping legislation aimed at deregulating the Texas telecommunications market. The legislation, titled an Act Relating to Furthering Competition in the Communications Industry (hereafter 2005 Competition Act), will lead to increased competition and innovation in the Texas telecommunications market, which in turn should improve service, decrease prices, and increase the array of choices available to consumers. The 2005 Competition Act will promote competition by eliminating entry barriers in two markets and deregulating pricing in a third. The Act contains three major reform measures, which are summarized in Table 1. These provisions work alone and synergistically to promote competition in the telecommunications marketplace. Each of the three reform measures is detailed below. Table 1. Three Reform Measures of the 2005 Competition Act Promise to Promote Competition and Innovation in Texas' Telecom Industry Change in Law Predicted Effect on Market Use of Electrical Delivery Systems for Access to Broadband and 43 Other Enhanced Broadband Services, Including Internet access Communications Deregulation of Certain Incumbent Local Exchange 65 Company Markets Local- exchange telephony Allows incumbent Number of broadband Internet electric utilities to service providers will offer broadband increase; competition with Internet access over incumbent cable service their network facilities provider and incumbent local- exchange telephone service provider will have spillover effect in other telecommunications markets. Deregulates pricing in Local-exchange service certain local-exchange providers will set rates telephone markets according to market conditions, not according to regulatory mandates Chapter Title Market Affected