Four More Years ... of the Status Quo? How Simple Principles Can Lead Us out of the Regulatory Wilderness

I. INTRODUCTION II. REGULATORY CLASSIFICATIONS III. JURISDICTIONAL MATTERS IV. AGENCY POWER V. CONCLUSION: ENDING THE "CHICKEN LITTLE COMPLEX" I. INTRODUCTION As the Bush Administration begins its second term, the telecommunications sector continues to wait and wonder whether President Bush will have anything more to say about telecom policy in the next four years than he did during the last four. The President was largely MIA on telecom and high-technology policy during his first term. (1) In many ways, this is hardly surprising. Telecom policy is very dry and technical; it does not make for good stump speeches by politicians or for engaging in dinner table talk for the average family. But that does not mean that Telecom policy is not important and deserving of at least some consideration by our elected officials. A significant portion of our modern Information Age economy is built on the foundations of our communications and high-technology sectors. The rules that govern these sectors, therefore, are of extraordinary importance compared to the rules governing agriculture or steel, two of the main economic engines of the past. Sadly, however, it is those sectors which continue to capture the President's attention. It remains to be seen if the President's policies will catch up with economic history. Even if the Bush team is not interested in pursuing major telecommunications reform, Congress might be. The respective Commerce committees have already started thinking about what the next version of the Telecommunications Act should look like. Technological changes unforeseen by the Telecommunications Act of 1996 ("Telecom Act"), such as the rapid development of wireless, the Internet and high-speed broadband, and VoIP, have forced lawmakers to begin considering how these new services fit into old regulatory paradigms. (2) Many policymakers still fail to grasp the fact that major portions of the Telecom Act have already been rendered somewhat obsolete by the rapid evolution of technology and competition in just the past ten years. If recent developments are any guide, this process will only continue in coming years, and at an accelerated pace. Regulatory reform is no longer merely an option; it is essential if lawmakers want to make sure that the laws governing this important sector keep pace with the rapidly changing times. Luckily, with the tenth anniversary of the Telecom Act rapidly approaching, there will be greater focus on its flaws and failings. With increased attention there will likely be many calls to reopen the issue and revise the Telecom Act. What went wrong with the Telecom Act? This is not the place for a full dissection of the Telecom Act to identify all its problems, but in general, a simple paradox summarizes what was most wrong about the measure: Congress wanted market competition but did not trust the free market enough to tell regulators to step aside and allow markets to function on their own. (3) Consequently, the FCC, the Department of Justice, the courts, and state and local regulatory commissions, have spent the last ten years treating this industry as a regulatory plaything with which to be endlessly toyed. Today, there is virtually no element of telecommunications that is not subject to some sort of meddling by some or all of these regulators. While it is fair to say that it was probably wishful thinking to believe we could have undone a century's worth of command and control regulatory policies in only a few short years, one would have hoped that we would not still be stuck debating the same issues today that dominated the agenda over a decade ago. Indeed, if Rip Van Winkle fell asleep in 1994 and woke up in 2004, he would not think he'd missed a beat if telecom regulation was any guide. Yet again, technology marches on even if the law doesn't. The law, however, is increasingly in conflict with marketplace realities or worse yet, is holding back further technological progress. …