The Legal Process and Political Economy of Telecommunications Reform

James Ming Chen, Michigan State University College of Law


American telecommunications law as regulatory phoenix appears to smolder in repeating cycles of reform, only to rise again from its ashes. From the heyday of public utility law's regulatory compact, through "mid-life" phases of crisis and reform, to the mix of triumph and letdown that is the Telecommunications Act of 1996, telecommunications law has passed through four distinct "ages." In each age, a dominant institution arose to address the perceived economic concerns of the day, only to run headlong against legal and political limits on its effectiveness.

During the Age of Accommodation, which suroived the passage of the Communications Act of 1934, state public utility commissions nurtured the Bell monopoly in its infancy. The Federal Communications Commission's efforts to deregulate equipment manufacturing and long distance defined an Age of Anxiety in the 1950s, 1960s, and 1970s. During the twelve-year Age of Antitrust, the Modified Final Judgment attempted to confine the divested Bell companies to the last of their monopolies, local carnage. Today's Age of Anticipation, heralded by the 1996 Act, boasts numerous strategies for enhancing entry and competition throughout the industry.

Telecommunications reform has been shaped by client politics, institutional stagnation and reform, imperfect economic competition, and technological innovation. The intrinsic political economy of telecommunications has defeated efforts to alter "legal process" through institutional revitalization and realignment. Redistributive debates over universal service and residential subsidies linger despite drastic technological change and legal evolution, while obvious solutions (such as immediate long-distance deregulation) languish. Far from converging into a single coherent body of policy, telecommunications law will continue to reflect longstanding tensions within the legal process and political economy of American telephony.