Regulatory Reality versus Theory

Abstract

Professor Eli Noam has written a thoughtful piece for the Financial Times entitled Separating telecoms? about the spectre of forced separation of network infrastructure management from service provisioning that is haunting European incumbent telecommunications companies. Noam suggests that European regulators seek negotiated compacts, rather than address the discrimination problem (indirectly) through the imposition of various degrees of functional, structural or full separation (divestiture) of the operations of telecommunications companies or (directly) through additional regulation or legislation. In contrast, a recent publication by Free Press, entitled Dismantling Digital Deregulation: Towards a National Broadband Strategy, cites deregulation as the root of America's broadband decline. Free Press essentially calls for the reversal of nearly every de-regulatory decision made by the FCC since 1996 and the imposition or re-imposition of pervasive telecommunications regulation, without regard for the costs of such a radical reversal of policy. Professor Noam's suggestions about how to strike a grand regulatory compromise on structural separations deserve serious study and consideration by America's regulators. They may also provide a template for discussion about how to resolve the highly polarized and seemingly never-ending debate over whether we need to impose common carrier or net neutrality mandates on broadband Internet access service providers.