The Telecommunications Act of 1996, the Takings Clause, and Tensions in Property Theory

Abstract

This Article draws on general takings scholarship to evaluate the telecommunications law and scholarship to date on takings challenges to the local-exchange provisions of the Telecommunications Act of 1996. Recent cases and scholarship have proposed many different rules of decision for these takings challenges: "per se" categorical pro-compensation rules, confiscatory ratemaking formulas, and "ad hoc" interest-balancing formulas. The authorities that have advanced each of these proposals are to a large degree informed by contestable assumptions about the nature of property and its constitutional protection. Takings law and scholarship both reflect deep disagreements between two overarching understandings of property-a Libertarian worldview and a Legal Realist worldview. These general understandings help make sense of and give context to many of the specific legal arguments advanced in the context of the takings challenges to the 1996 Act. But to the extent that telecommunications lawyers and scholars are relying on one or the other of these general understandings, their arguments are no more persuasive than their general understandings are valid. Although this Article cannot resolve the disputes about the 1996 Act definitively, the Article does help identify the questions central to the takings analysis, by showing how sound takings doctrine integrates the narrow concerns of telecommunications policy with the broader concerns of constitutional property theory.