The Proposed Deregulation of Domestic Common Carrier Telecommunications

Legislation introduced but not enacted by Congress last session reflects the movement of the drive for deregulation of the telecommunications field. The structure of the telecommunications industry is such that there are several monopolies, as well as competitive specialized services. Under the Communications Act of 1934, the Federal Communications Commission (FCC) was given primary regulatory responsibility, with a mandate to encourage universal availability. Technological changes have begun to encourage competition, drawing into question the FCC's assumption that in many of the regulated services a monopoly is the best way of accomplishing the mandate. In response, the FCC has been willing to risk losing the advantages of economy of scale in favor of specialization. State public utilities commissions (PUCs) have authority over intrastate services, but the proposed legislation would have given this authority to the FCC. This proposal has the advantage of uniformity. American Telephone & Telegraph's entry into unregulated markets raises the spectre of its using the regulated markets for subsidies. The proposed legislation would have attacked this with a requirement of separate subsidiaries, but there are weaknesses in this approach. Legislation shows considerable sophistication, however, and Congressional guidance is definitely needed.