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Google Fiber's Avoidance of Phone Service Makes Case for Obsolete Law -- Part 15 Obsolete Communications Law Series

This week Google's actions made the case that U.S. communications law and regulation is obsolete.

The Head of Google Fiber disclosed that Google considered offering phone services in Kansas City as part of its bundle of Gigabit "ultra high-speed" Internet service and TV offering, but declined to do so when they became familiar with the prohibitive morass of legacy analog federal and state telephone regulations with which Google would have had to comply. While acknowledging that the incremental cost of offering voice services would have been "almost nothing," Mr. Medin lamented that Google would have had to build a more complex billing system to comply with the various state calculations in Kansas and Missouri.

It is telling that with all the special tax breaks and large business subsidies that Google was offered to choose Kansas City as the pilot Google Fiber city, they were still not enough to offset the high operational, management, and regulatory costs to comply with legacy telephone regulations.

If Google, a company with $47b in cash and a 52% gross profit margin can't afford or justify the cost of complying with legacy telephone regulations in just one city in America, and if the software company known to routinely tackle the world's most complex and difficult software tasks was unwilling to tackle coding a billing system for telephone phone service, imagine what a burden it is for communications companies that have a mandate to offer phone service over obsolete copper technology wherever they are in business?

This should be a wake-up call to the FCC and all the states that have not modernized their state telecommunications and regulations: their obsolete rules are a huge barrier to modernizing infrastructure and services for their citizenry. Simply, obsolete communications regulation is a dead end without a future; an unnecessary drag on investment; and a nonsensical cost sinkhole for any business that must comply with them.

In a word, Google actions made the case that these obsolete regulations don't "scale."


Obsolete Communications Law research series:

Note: Please see here for a summary powerpoint presentation of the problems with obsolete communications law.

Part 1: "Obsolete communications law stifles innovation, harms consumers"

Part 2: "The FCC's Public Interest Test Problem"

Part 3: "FCC Special Access: Communications Obsolete-ism vs. Modernism"

Part 4: "Obsolete Analysis Will Doom DOJ's Antitrust Probe of Cable"

Part 5: "Why U.S. Communications Law is Obsolete"

Part 6: "FCC's Slippery Slope to Regulating Content, Speech, and the Press"

Part 7: "FCC's Over-Reliance on Obsolete Law"

Part 8: "Google Fiber: Modern Technology, But Obsolete Policy Thinking"

Part 9: "FCC Showcases Its Growing Obsolescence"

Part 10: "The FCC's 1887 Railroad Regulation Mindset"

Part 11: "U.S. Government's Obsolete and Wasteful Spectrum Hoarding and Rationing"

Part 12: "U.S. Falling Behind the World in Auctioning Broadband Spectrum"

Part 13: "U.S. Government's Obsolete and Dysfunctional Spectrum Management"

Part 14: "A Welcome Catalyst for Modernizing Obsolete Communications Law & Regulation"