NEWS

Thune may play big role in digital access

Christopher Doering

WASHINGTON – A powerful voice from South Dakota soon could play a pivotal role in shaping the digital age in which consumers increasingly are tethered to their smartphones or tablets.

Sen. John Thune is in line to become chairman of the powerful Senate Commerce, Science and Transportation Committee. He would take on the new position as residents in even the most isolated parts of the rural countryside demand faster Internet connection.

Whether he takes charge of the committee, or instead retains the No. 2 spot that he currently holds, depends on Republicans winning control of the Senate this fall, something many pundits say is likely.

As head of the panel, which has jurisdiction over issues including highways, space, product safety and insurance, the South Dakota Republican could oversee changes to the country's communication law that critics say have failed to keep up with innovation and modernization in cable, telephone and the Internet. How it is changed and which companies are affected could spur or stifle investments in new technologies and affect millions of customers who use them.

"Don't look at this as a national issue that doesn't affect South Dakota, for crying out loud," said David Owen, president of the South Dakota Chamber of Commerce and Industry. "We can't go thinking it doesn't matter here. It matters very much to South Dakota, and people need to pay attention to it."

Owen said South Dakota, where a relatively small population is spread across a geographically large state, has benefited from the growth in telecommunications and technology. Changes to regulations by Congress must carefully balance the state's growing demand for faster speed connections, he said, while not placing overly taxing rules on the companies that install, maintain and ultimately profit from the infrastructure.

Any changes enacted by Congress would be made to the Telecommunications Act signed into law in 1934 by President Franklin Roosevelt to regulate radio, television and telephone communications and to create the FCC to regulate them.

The last major revision of the act occurred in 1996 when most Americans received their Internet through a clunky dial-up connection and a lucky few had some type of mobile device rather than today's popular smartphone. In a sign of how much technology has changed, the bill included more references to a "pay phone" than the "Internet."

Former Sen. Larry Pressler of South Dakota was chairman of the committee in 1995 and 1996.

"There are a whole host of things that weren't contemplated in 1996," said Robert McDowell, a former commissioner at the Federal Communications Commission who now is a visiting fellow at the Hudson Institute, a nonprofit think tank in Washington. "Changes in technology and market advancements and consumer demand are creating this convergence that is quickly outrunning all the laws in place."

Thune said telecommunications reforms are "long overdue" and would be a "high priority" if he were chairman of the Senate committee.

He said the outdated law has fostered growing uncertainty for the FCC, which is left to interpret today's technologies using the antiquated framework. As a result, the FCC has faced a series of legal challenges, notably surrounding its effort to define "net neutrality." That's the idea that government must make sure all content flowing through the Internet is treated equally. The onus, Thune said, is on Congress to "do a better job" modernizing the law in face of a new digital age.

"There is a marketplace out there that is kind of clamoring for clarity and for getting away from the ambiguity that is leading to all these legal challenges and for Congress to at least set some general parameters," Thune said. "It's going to be a heavy lift, no doubt. It always is because you have so many competing factions, and it's now such a more complicated marketplace than the last time this was done."

Regulators and academics from South Dakota following the Telecommunications Act debate acknowledge that any reform will take time. And while the final outcome is far from certain, they're optimistic the state could benefit if Thune plays a meaningful role in the outcome.

"Having him move into the chairmanship (of the Senate committee) would give South Dakota and rural states an even larger voice on these issues," said Chris Nelson, vice chairman of the South Dakota Public Utilities Commission.

Dozens of issues important to lawmakers could be addressed in revising the Telecommunications Act. Among them: taxes on the Internet, rules governing how local governments institute their own telecommunication laws, customer privacy issues and net neutrality. With powerful phone, cable, Internet and other companies vying to influence the final outcome, significant revisions to the decades-old bill could affect a variety of interests, ranging from AT&T and Comcast to Facebook and Google.

"There's certainly a lot of money swishing around, and that's going to raise Thune's profile some if he takes a big hand in it," said Ken Blanchard, a professor of political science at Northern State University in Aberdeen.

Pressler said the Telecommunications Act of 1996, the first overhaul of the telecommunications industry in more than 60 years, fell short when it came to regulating cable companies. President Clinton had threatened to veto the measure if it included cable regulations.

Pressler supported allowing consumers to purchase programming from a menu of options and wanted limits on advertising.

"Cable television has abused its position terribly," Pressler said.

Blanchard said the Telecommunications Act is unlikely to be a priority for Congress next year. Taxes, budget and the Affordable Care Act expected to be some of the hot-button issues. Even if Congress makes reforms to the 1934 act, the rapid pace of change in technology soon could leave the law outdated once again.

"Those changes happen so rapidly that Congress can barely keep up with them as it is," Blanchard said. "If they redo this thing completely from the ground up tomorrow, there is a good chance that half of it will be out of date by next week."