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Abstract:
This short paper discusses the FCC's authority, under its so-called ancillary jurisdiction (under Title I of the Communications Act), to address competition problems that may arise in Internet markets. It is argued that the FCC likely does not have jurisdiction to address most Internet regulatory issues, because whatever expansive readings such ancillary jurisdiction has received in the past are no longer tenable. The paper proposes, instead, a new, limited statutory interconnection rule, which the FCC could enforce in limited ways in Internet markets.

The paper also argues that, even if the FCC does have authority to develop its own common law of Internet regulation, a limited grant of statutory authority is a superior regulatory construct. The paper also argues that FCC administration of this proposed statute is superior to remitting all Internet interconnection problems to the common law processes of antitrust.

Professor Philip Weiser's contribution to the same journal issue (also available on SSRN) takes a different, more expansive view of the FCC's ancillary jurisdiction.

Internet, Federal Communications Commission, Interconnection

Abstract:
The Telecommunications Act of 1996 has yielded more litigation and less local competition than its supporters expected or intended. Calls for its reform are multiplying. The article diagnoses the 1996 Act's failings and prescribes a framework for reform. The successful deregulations of the transportation industries and of long-distance telecommunications (precedents the 1996 Act sought to follow) demonstrate that the Act should have taken additional steps to promote intermodal telecommunications competition. Transportation deregulation successfully prompted competition where (as in the case of airlines and trucking) multiple firms could compete on an intramodal basis or where (as in the case of railroads) the single firm was subject to intermodal competition from firms using other technologies. The 1996 Act's reliance on the unbundling of incumbent local telephone companies' networks reveals that its supporters thought that portions of the local wireline networks would remain bottlenecks. The lesson, therefore, is that the 1996 Act should have taken additional steps to create the conditions for intermodal competition.

Based on this analysis, the article outlines a new communications law that increases the possibilities for intermodal competition. Indeed, the glimmers of hope for local competition - cell phone substitution and voice-over-Internet-protocol (VoIP) telephony - are intermodal competitors. Although the 1996 Act did move in this direction and the Federal Communications Commission is vigorous on several fronts, more can be done. Spectrum reform (the most significant missed opportunity in the 1996 Act) and other steps would decrease legal and economic barriers to intermodal competition. The article also addresses local and state control of telecommunications carriers, regulatory parity, universal service reform, and government funding of research and infrastructure, and it offers a technology-neutral regulatory scheme for VoIP. The proposed deregulatory agenda seeks a law capable of accommodating the speed and diversity of technological change in this "Internet time."

Telecommunications, Internet Regulation, Telecommunications Act of 1996, Deregulation, Transportation Deregulation

Abstract:
The Telecommunications Act of 1996 aimed to introduce competition into historically monopolized local markets. As frustration with instances of incumbent telephone companies' impeding new competition mounted, new entrants and consumers turned to antitrust remedies, seeking both injunctive orders and damages under theories such as essential facilities and refusal to deal. The U.S. Courts of Appeals are divided as to whether antitrust remedies are available in such cases. Some find that the specific local competition provisions of the 1996 Act occupy the field; others hold that a specific antitrust savings clause in the 1996 Act requires that antitrust be available notwithstanding regulation. A case currently pending before the Supreme Court (Law Offices of Curtis V. Trinko, LLP v. Bell Atlantic Corp.) presents the issue, although the case may be resolved on antitrust standing grounds without addressing whether the 1996 Act preempts antitrust remedies.

This article concludes that antitrust remedies should not be recognized where the specific practice that forms the basis of the complaint is one within the scope of the interconnection agreements required by the 1996 Act and the implementing FCC regulations. Antitrust courts have long been reluctant to entertain essential facilities (and other) cases where the remedy effectively would require them to set prices between incumbents and new entrants. And regulatory law, through the venerable filed rate doctrine, has long recognized that the setting of such prices is a quintessentially regulatory task. The article concludes that the 1996 Act itself, through its elaborate regulatory scheme for interconnection and unbundling agreements, commits this task to regulatory agencies.

Recognizing that antitrust has long promoted competition in telecommunications, the article notes that antitrust is not completely preempted in local markets. Rather, it yields only in the narrow realm of matters required to be contained in interconnection and unbundling agreements. Moreover, when the FCC acts to forbear from regulation, antitrust fully occupies the field.

A comment on the article by Professor Steven Semeraro was published in the same issue of the journal and is available on SSRN as well.

Antitrust,Telecommunications,Essential Facilities, Filed Rate

Abstract:
The drive to increase broadband penetration has reached a critical policy point in the United States with President Bush,the Federal Communications Commission, and numerous industry groups all offering new agendas. Naturally, many eyes have turned to Korea,which has been the undisputed world leader in broadband deployment for several years.

The United States should consider the benefits of increasing on-line government services as well as the benefits of increasing computer education. These are costly projects to be sure,and so their prospects for adoption are uncertain, but they undeniably increase the attractiveness of broadband and decrease consumer reticence to subscribe. Onthe other hand, THE United States should and probably will maintain its traditional skepticism for more direct market intervention, such as government provision of infrastructure or below market rate loan to particular companies.

Broadband, penetration