Speta on Antitrust and Local Competition under the Telecommunications Act: A Comment Respecting the Accommodation of Antitrust and Telecom Regulation

Abstract

The Telecommunications Act of 1996 was intended to stimulate competition in local telephony in part by requiring the existing dominant local telephone service providers to assist new entrants by (1) interconnecting, (2) selling their service at wholesale rates for resale, and (3) providing competitors access to elements of their networks on an unbundled basis. Alleged resistance by the dominant local service providers to the affirmative duties created by the 1996 Act has led to a series of antitrust cases in which new entrants and telephone consumers argue that by violating duties imposed by the Act, local telephone providers violate Section 2 of the Sherman Act. The question whether a violation of these statutory duties may give rise to antitrust liability is currently before the U.S. Supreme Court in Verizon v. Trinko. James B. Speta, Northwestern University School of Law, has argued that the principles underlying the Keogh Doctrine support the conclusion that conduct within the scope of an interconnection agreement mandated by the 1996 Act should not give rise to antitrust liability even if the conduct violates a duty imposed by the Act. Speta interprets the Keogh Doctrine as establishing a principle that when Congress places rate-making and related authority within the purview of a regulatory agency, it intends to remove the issue from the courts. This piece responds to Speta, arguing that (1) the Keogh Doctrine was never intended to displace entirely antitrust review; (2) other antitrust regulatory accommodation doctrines that do block antitrust review are inapplicable to the duties imposed by the 1996 Act because that Act, unlike previous regulatory legislation, was explicitly intended to serve consumer welfare by stimulating competition; and (3) the language and purpose of the 1996 Act weigh in favor of applying the antitrust laws to conduct within the scope of interconnection agreements required by the Act.