Network Interconnection and Takings

Abstract

Seeking to encourage competitive markets or further other policies, courts and regulators have mandated interconnection between telephone networks and other communications networks. For instance, courts and regulators mandated interconnection between AT&T and the competitive long-distance companies in the 1980s and between the incumbent Bell monopolists and the competitive local exchanges under the 1996 Telecommunications Act. It is generally assumed that these mandatory interconnection regimes require intercarrier payments to avoid a taking under the Fifth Amendment. This legal belief has led in part to burdensome regulatory access charge and intercarrier payment regimes.

In light of recent economic proposals claiming that under some conditions efficient interconnection requires no intercarrier payments, this Article asks whether interconnection without payment constitutes a taking. Drawing on the history of common carriage law and examining the historical property rights of telephone and other communications industries, the Article concludes that interconnection without payment can be consistent with constitutional requirements.