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Communications markets have made much progress towards competition and deregulation in recent years. However, it is increasingly clear, in the age of the Internet and the digital revolution, that much more needs to be done, and that new approaches, both at the Federal Communications Commission and in Congress, will be required to complete the task. In this volume, the Progress and Freedom Foundation presents nine papers by communications policy experts and government policymakers that show how to finish the job of deregulating communications markets and reforming the FCC.
The Telecommunications Act of 1996 was a landmark piece of legislation for an industry moving from a monopoly orientation towards competition, but additional steps are needed to complete the process of implementing the pro-competitive, deregulatory vision of the act. Bringing together a group of the caliber represented in this book makes possible the best recommendations about the exact nature of those necessary changes. In this volume, the most difficult and politically-charged hot-button issues involving local and long distance competition, universal service, spectrum allocation, program content regulation, and the public interest doctrine are confronted head-on. As importantly, the authors recommend specific reform proposals to be considered by the Federal Communications Commission and Congress.
The ideas contained in the experts' essays were presented and debated at a conference hosted by The Progress & Freedom Foundation, which was held in Washington, DC, on December 8, 2000. The Progress & Freedom Foundation studies the impact of the digital revolution and its implications for public policy. It conducts research in fields such as electronic commerce, telecommunications and the impact of the Internet on government, society and economic growth. It also studies issues such as the need to reform government regulation, especially in technology-intensive fields such as medical innovation, energy and environmental regulation.



Chapter 1. Communications Deregulation And FCC Reform: Finishing The Job

Communications markets have made much progress towards competition and deregulation in recent years, but much remains to be done. Indeed, as 2000 draws to a close, it is increasingly clear that much more needs to be done, and that new approaches, both at the Federal Communications Commission and in Congress, will be required to complete the task. In this volume, we present six papers that show how to finish the job of deregulating communications markets and reforming the FCC.
Jeffrey A. Eisenach, Randolph J. May

Chapter 2. The Great Digital Broadband Migration

In the wake of the 1996 Act, the FCC is often cast as the Grinch who stole Christmas. Like the Whos, down in Who-ville, who feast on Who-pudding and rare Who-roast beast, the communications industry was preparing to feast on the deregulatory fruits it believed would inevitably sprout from the Act’s fertile soil. But this feast the FCC Grinch did not like in the least, so it is thought.
Michael K. Powell

Chapter 3. Technology and Competition: A Five-Year Outlook for The Telecommunications Marketplace

Even to the casual observer, it is clear that the broadband revolution is at hand. High-speed Internet access is commonplace in the workplace and many homes have high-speed Internet access through cable modems or Digital Subscriber Lines (DSL).1 Handheld wireless devices, including cell phones, now support limited e-mail and web access. Nevertheless, the revolution has not been instantaneous: consumers cannot simply write a check for the bandwidth they desire, but are dependent on the infrastructures put in place by the service providers in their area. In some instances they are able to choose between high-speed cable modem access offered by a cable operator, and wireline or wireless DSL services offered by an incumbent or entrant telephone company. In other cases they may be offered one service but not the other. In some areas, the only practical means of connecting to the Internet is through a dial-up modem2.
Charles A. Eldering

Chapter 4. Local and Long Distance Competition: Replacing Regulation with Competition

For more than 60 years, United States telecommunications policy was guided by the Communications Act of 1934. Despite the incredible changes that occurred in the telecommunications sector during this long period, very few changes were made in the law. Indeed, it was the failure of the 1934 Act to provide the Federal Communications Commission (FCC) with the necessary guidance in dealing with one of these changes — competitive entry — that forced antitrust authorities to wrest control of the sector from the FCC in the 1980s.1 In 1996, partly in response to controversies created by the resulting AT&T antitrust decree, the Congress passed a new Telecommunications Act that opened all markets to entry, but evidenced a misguided belief in the efficacy of regulation to achieve this result.2 Rather than freeing the entire sector from government regulation, the 1996 Act established a new, more complicated regulatory regime that has created controversy, litigation, and only modest progress.
Robert W. Crandall

Chapter 5. Reforming Universal Service One More Time

Major changes in telecommunications technology have encouraged, and even forced, completely new approaches to the provision of telecommunications services. There is a worldwide recognition that reliance on competitive markets can encourage the deployment of advanced, but continually changing technology, more effectively than government, and that the availability of competitive telecommunications alternatives can help promote the efficient delivery of a wide range of benefits to consumers.
Kenneth Gordon

Chapter 6. “Propertyzing” The Electromagnetic Spectrum: Why It’s Important, And How To Begin

For the past century the telecommunications sector of the U.S. Economy has been an arena of substantial technological change and improvement. In 1900 telephony was in its infancy, and the first over-the-air broadcast of human speech had yet to be made. By the end of the century, telephone, radio, and television were commonplace but highly valued parts of American lives, while both wireline- and spectrum-based telecommunications had become essential to all aspects of the business world.
Lawrence J. White

Chapter 7. Program Content Regulation Revisited

The subordinate First Amendment status of over-the-air broadcasting is long-standing and well-known. Red Lion Broadcasting v. Federal Communications Commission (FCC) 1 authorized the Commission to require broadcasters to air material (free of charge) that the broadcaster did not wish to air. FCC v. Pacifica Foundation 2 authorized the Commission to impose sanctions on stations airing programming that the Commission deemed indecent.
L. A. Powe

Chapter 8. The Public Interest Standard—Is It Too Broad To Be Constitutional?

More than three hundred years ago, in the second of his famous Two Treatises, John Locke wrote that the legislature “cannot transfer the [p]ower of [m]aking [l]aws to any other hands. For it being but a delegated [p]ower from the [p]eople, they, who have it, cannot pass it over to others.”
Randolph J. May

Chapter 9. Telecom Deregulation, Broadband Deployment and Economic Growth

The meltdown in the Information Technology (“IT”) sector is of grave concern as we look forward to next year and the possibility of continuing this amazing economy and strengthening it as we enter a new administration. There are two areas that are going to make a huge difference in whether we can enlarge upon the strength of this economic expansion or whether we see the fear of a real downturn in the economy.
W. J. Tauzin


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