Antitrust and local competition under the telecommunications act

Abstract

The centerpiece of the Telecommunications Act of 1996 called by its own sponsors the most deregulatory statute in U.S. history1 was the introduction of competition to historically monopolized local telecommunications markets. To do so, the Act took two significant steps. First, it eliminated all legal barriers to the entry of new local telecommunications carriers. Second, because Congress thought new local carriers might not be able economically to duplicate every element of a local telecommunications network, the Act also required the incumbent carriers to share elements of their networks with these new entrants. Slightly over seven years later, however, the fundamental legal structures governing this sharing regime are not settled in place. The Federal Communications Commission (FCC) has only just completed its third attempt at regulations,2 its two prior attempts having been judicially declared in large part either contrary to the statute or arbitrary and capricious. Whether the FCC will succeed this time is highly uncertain, as almost every relevant group the incumbent local carriers, the new entrants, and the consumer advocates has expressed dissatisfaction (loudly) and promised further legal challenges.3