Tuesday, November 25, 2003 - The Progress & Freedom Foundation Blog

What Congress Didn't Say In 1996

Just catching up on a stack of reading before the Thanksgiving holiday break, so I perused Judge Easterbrook's decision earlier this month in AT&T Communications of Illinois v . Illinois Bell Telephone Co. This is the case in which a federal appeals court held that, yes, the Illinois legislature may pass a law that provides direction to the Illinois Commerce Commission in setting the TELRIC rate for the UNE Platform, but, no, the legislature can't just pick out a couple of cost factors that will move the rate in one direction without looking comprehensively at other cost components.

This sounds about right as a matter of interpretation of the 1996 Telecom Act. But what struck me while reading the Seventh Circuit's decision--in the same way I'm struck every time I think about the mess the FCC has made in implementing Section 251's network unbundling requirement--is how it all might have been different if Congress had been a little less ambiguous in the '96 Act.

After all, consider that, in essence, the whole unbundling and sharing regime devised by the FCC pretty much has come to rest on its interpretation of two little words. The scope of the unbundling obligation rests on the FCC's understanding of the statutory term "impair" in Section 251, and the price at which unbundled elements must be offered by incumbents to competitors rests on the agency's understanding of the statutory term "cost" in Section 252. Really. Most of the discretion conferred on the FCC to establish the UNE regime derives from the ambiguity inherent in those two little words.

Now, it's true that the Supreme Court and the D.C. Circuit both have told the FCC that "impair" means a lawful UNE regime cannot be as unlimited and expansive as the one the FCC thus far has insisted on implementing. (You wonder why one Supreme Court decision was not enough to bring home the point ot the agency!) My guess is that the courts will find the latest iteration in the agency's Triennial Review decision still too expansive to pass muster--and, in any event, as I've written, as a matter of policy, it gets a failing grade.

If Congress only had said a bit more to indicate a preference for promoting facilities-based competition over resale (that's what UNE-P is), then perhaps the Commission would have been forced early on to devise a less expansive UNE regime, one tilted more towards stimulating facilities-based investment. Ah, but it's fun to imagine!

I suspect after the 2004 election, Congress may be ready to turn its attention to begin writing "The Telecommunications Deregulation Act of 2006". Even if the UNE regime has been scaled back by virtue of a judicial bear hug--this time one that grasps the agency and won't let go--it will still be time for Congress to provide a new communications policy roadmap on many fronts. And I bet that, with telecom markets being disrupted, destroyed, redefined, and recreated everyday by new technologies, Congress will understand the need to be more clear about establishing an unambiguously deregulatory course.

posted by Randolph May @ 6:40 PM | General