I'm not sure I agree it's dysfunctional. "We're going to block some people off from the phone lines because we don't think they ought to be making calls" is exactly the kind of policy that should be heavily scrutinized.
It could be dysfunctional if the application of that heavy scrutiny is overwhelmingly biased towards a particular interest rather than being applied uniformly. Complaints of dysfunction aren't based on disputes of principle, but anger at their implementation.
It says it is about tools that "allow phone companies to block unwanted calls" (emphasis mine). So the one wielding the tool is the phone company. It's unclear whether users can opt out of the default. It's also unclear whether "unwanted" is defined with respect to the user or the company.
If it takes a decade and you wait until 50% of phone calls are spam, it's dysfunctional. Glacial speed is not the same as careful scrutiny.
You either need to update regulations on a fast time scale, or a way to encourage actual competition (so the heavy anti-trust-like regulations aren't required). Otherwise, you've just given up on there ever being meaningful progress/innovation in the industry.
