From International Competitive Carrier to the WTO: A Survey of the FCC’s International Telecommunications Policy Initiatives 1985-1998

With the creation and implementation of the February 1996 World Trade Organization Agreement on Basic Telecommunications Services, the international telecommunications community has (at least on paper) promised ostensibly to move away from markets characterized by monopolies and toward a world of competition and deregulation. The big question, however, is whether these efforts will actually lead to better economic performance in the market for international telecommunications products and services. This Article examines one particular, yet extremely significant, portion of this inquiry—how much have U.S. international telecommunications policies specifically helped or hindered this process. This Article, after surveying Federal Communications Commission (FCC or Commission) precedent from the FCC’s first major international policy decision (International Competitive Carrier) through the FCC’s implementation of the WTO Agreement (January 1, 1998), concludes that despite a few laudable achievements, the FCC’s efforts have been marred by both the demonstrable rise of neo-mercantilism at the expense of consumer welfare, as well as substantial legal and economic analytical inconsistencies and outright errors resulting from their embarrassing attempts to implement and defend this neo-mercantilist policy. By adopting such legally and economically flawed policies, the United States has achieved neither trade policy’s basic goals of promoting U.S. investment abroad nor the maximization of consumer welfare under the FCC’s public interest mandate. Tragically, the only tangible achievement apparently has been the delay of effective WTO implementation and the rise of international ill-will against the United States and, a fortiori, U.S. firms

Section 10 Forbearance: Asking the Right Questions to Get the Right Answers

The Telecommunications Act of 1996 aimed to “provide for a pro-competitive, de-regulatory national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information technologies and services to all Americans….” Key to the Federal Communication Commission’s ability to satisfy this deregulatory mandate is Section 10 of the 1996 Act which provides the agency with express legal authority to forbear from enforcing certain portions of the Communications Act. In this paper, we use the agency’s Phoenix Forbearance Order as a template for outlining how the Commission can improve its forbearance analysis. Our analysis focuses on forbearance from the unbundling provisions in the 1996 Act, but we also show how the Phoenix Forbearance Order is relevant to the net neutrality debate. In particular, the Phoenix Forbearance Order rejects the validity of forbearance in the presence of either monopoly or duopolistic competition. Given the Commission’s finding that Broadband Service Providers are “terminating monopolists,” forbearance cannot be used to create what is colloquially referred to as “Title II Lite.” In fact, if the retail broadband service is classified as a Title II service, then the Commission’s stance on broadband competition and the Phoenix Forbearance Order’s conclusions on duopolistic competition likely requires, for the first time, the price regulation of all retail broadband connections

Competition After Unbundling: Entry, Industry Structure, and Convergence

In the last few years, U.S. telecoms policy has shifted from encouraging the sharing of existing networks to facilitating the deployment of advanced communications networks. Given the large capital expenditures required for these networks, there can be only a few of such networks. In light of the natural forces that limit the number of facilities-based suppliers, it is vital for policymakers to investigate and implement rules that make markets more conducive to facilities-based entry and eliminate any existing rules that discourage deployment. The purpose of this Article is to provide a simple conceptual framework to evaluate the effect of particular rules and regulation on the construction of advanced communications networks and the expansion of existing networks into new markets. We provide numerical examples and a number of applications to illustrate how the conceptual framework implicates particular rules and regulations as to their effect on facilities-based entry. Applications include an analysis of convergence, regulated limitations on service offerings, the pernicious effects of cable franchising, and the potential for collusion

Competition After Unbundling: Entry, Industry Structure, and Convergence

In the last few years, U.S. telecoms policy has shifted from encouraging the sharing of existing networks to facilitating the deployment of advanced communications networks. Given the large capital expenditures required for these networks, there can be only a few of such networks. In light of the natural forces that limit the number of facilities-based suppliers, it is vital for policymakers to investigate and implement rules that make markets more conducive to facilities-based entry and eliminate any existing rules that discourage deployment. The purpose of this Article is to provide a simple conceptual framework to evaluate the effect of particular rules and regulation on the construction of advanced communications networks and the expansion of existing networks into new markets. We provide numerical examples and a number of applications to illustrate how the conceptual framework implicates particular rules and regulations as to their effect on facilities-based entry. Applications include an analysis of convergence, regulated limitations on service offerings, the pernicious effects of cable franchising, and the potential for collusion