Hope a Better Rate for Me

Abstract

Ratemaking, the dreariest legal expression of the dismal science, is sexy again. Once upon a time, judicially enforced constitutional restraints on the setting of public utility rates strengthened the intellectual backbone of the Lochner era. Contemporary interest in this doctrine stems from the imposition of "the duty to interconnect, to lease unbundled network elements, and to sell services for resale" on incumbent firms in the few remaining "market segments that have natural monopoly characteristics. The Federal Communications Commission's contribution to this great legal transformation, its embattled total element long-run incremental cost rule (TELRIC), will in all likelihood be reviewed under some variant of the confiscatory ratemaking doctrine. So controversial is TELRIC that it has inspired a literature on "deregulatory takings" and a counter-literature denying the entire phenomenon. On this occasion, I do not wish so much to re-engage this debate as to entertain the combatants. I therefore offer the following anthem for our deregulatory age, a ballad "dedicated to the [law] I love." Sing along, all you who debate the notion of deregulatory takings, "And we'll have memories for company / Long after the songs are sung."