April 2000
Cable, Internet Access and the Commonwealth: Evaluating The Ballot Initiative's Impact on Government and Consumers
By Stuart N. Brotman

I. Introduction

Since the late 1970s, government officials and citizens of Massachusetts have made substantial contributions to reforming policies that led the way to our modern Information Age. The Commonwealth, for example, was the first state to deregulate cable television and supported federal efforts to allow the introduction of competitive video services such as those offered by DirecTV and other satellite companies. Massachusetts also helped reform an outmoded rate-of-return regulatory system that governed the telephone industry for more than half a century. In these instances, the Commonwealth assumed a progressive role in the communications field by thinking carefully about when government should be involved in overseeing communications industry business decisions, and in limiting its role with considerable precision if a regulatory scheme was to be put in place.

With the introduction of a ballot initiative styled by its proponents as a measure to "promote competition in the cable-based Internet access market,"¹ Massachusetts will again be thrust in a leadership position regarding communications competition and deregulation. The stakes are large indeed, and not just for the commercial interests that are vigorously competing for more market share, greater customer loyalty and increased revenues.

As everyone who has approached this issue will agree, cable access to the Internet is a complicated area. It has long-range implications for government and for residential customers in the Commonwealth, both in terms of potential benefits and potential risks. Within advocacy forums such as courts and city councils, it has been easy for proponents of the ballot initiative to portray the measure as "all gain, no pain." Yet away from the microphones and press conferences, even the most ardent proponents are pausing in recognition that no important public policy choice is as simple as it seems on first impression.

Regardless of where people come out on the issue, there can be no disagreement on the fundamental nature of our electoral process. As with all other ballot initiatives, the Commonwealth will best be served if voters, myself included, are able to evaluate a complete, critical analysis of information provided from a variety of perspectives. Reasoned choices based on a vigorous discussion and analysis of competing viewpoints is our best guarantee that the "public interest" will be served. This White Paper neither begins nor ends with the premise that government regulation of the cable television industry is inherently a bad public policy choice. Rather, it is designed to introduce some reasoned observations that require closer questioning by voters throughout the campaign. I have not attempted to be exhaustive in my analysis here because I expect to explore some of the issues discussed in greater detail at a later time, as well as to evaluate other arguments both pro and con. I do intend to be provocative, however, and the observations presented here share a common theme: what are the practical implications of this ballot initiative for individual consumers in Massachusetts?

Unfortunately, much of the debate about this issue so far has taken place outside Massachusetts, so it is not surprising that there has been little discussion regarding how it would affect Commonwealth priorities and interests. Our beloved former House Speaker Tip O'Neill noted that "All politics is local," and we would be well served to think about the practical implications of this ballot initiative if it is approved.

Frankly, after reviewing it, I am uncomfortable that the initiative is necessary now; I have questions about its "shoot now, think later" approach, especially since we all are operating in Internet time. But perhaps I am most troubled that this issue is being portrayed to voters as a risk-free approach. I follow Oliver Wendell Holmes' search for simplicity on the other side of complexity, and hope that as the election debate begins, none of us will be satisfied to find simplicity on this side of complexity, which is where we are today as the voters begin to consider this important issue.