Adjusting Regulation to Competition: Toward a New Model for U.S. Telecommunications Policy

Abstract

This Article explains the monopoly rationale for conventional approaches to telecommunications regulation, demonstrates how the U.S. telecommunications market has changed since the Telecommunications Act of 1996, and then examines whether, in the light of those changes, the conventional approach remains an appropriate paradigm for U.S. telecommunications policy. This Article finds that the general answer is no, and that ex ante regulation that depends for its rationale on monopoly market structure should give way to ex post intervention against specific, anticompetitive acts on the model of conventional antitrust and competition policy. The Article finds, however, that certain kinds of regulation-notably interconnection-still have a role to play in advancing telecommunications policy objectives. This study's conclusions thus challenge the argument that policymakers should wait until market conditions become more competitive to deregulate. But it also challenges claims that the market has developed to the point that Congress should eliminate all industry-specific regulation and regulatory authority in the U.S. telecommunications market. This Article instead proposes eliminating ex ante regulation that depends on monopoly for its rationale in favor of ex post competition enforcement, but makes allowance for other regulation in those specific circumstances where experience proves such intervention necessary and effective for protecting consumer welfare.