Telecommunications Regulation: An Introduction

Abstract

This paper examines the justifications, history, and practice of regulation in the US telecommunications sector. We examine the impact of technological and regulatory change on market structure and business strategy. Among others, we discuss the emergence and decline of the telecom bubble, the impact on pricing of digitization and the emergence of Internet telephony. We briefly examine the impact of the 1996 Telecommunications Act on market structure and strategy in conjunction with the history of regulation and antitrust intervention in the telecommunications sector. After discussing the impact of wireless technologies, we conclude by venturing into some short term predictions. We express concern about the derailment of the implementation of the 1996 Act by the aggressive legal tactics of the entrenched monopolists (the local exchange carriers), and we point to the real danger that the intent of Congress in passing the 1996 Act to promote competition in telecommunications will not be realized. We also discuss the wave of mergers in the Telecommunications and cable industries, the telecom meltdown of 2000-2003, and issues that arose from the triennial review by the FCC of implementation of the 1996 Act.