The Future of Telecommunications Regulation

Ten years of procompetitive regulation at the Federal Communications Commission and the pending divestiture of AT&T to settle the decade-old government antitrust case against the company have sown the seeds for a fundamental restructuring of the telecommunications industry. Competition, though as yet vigorous only for a handful of services and devices, is nevertheless healthy and growing. The salient regulatory questions are the extent to which the industry can become competitive, the rate at which the AT&T monopoly will erode, and how regulation can ease and speed the transition to a more efficient industry structure. The purpose of this paper is to lay out the role of the FCC during the next decade or two as the industry becomes increasingly competitive but AT&T continues to have a dominant position in long distance telephone and certain key elements of the equipment market.