Competition and Deregulation in Telecommunications; The Case for a New Paradigm Duesterberg, Thomas J. and Gordon, Kenneth

Passage of the Telecommunications Act of 1996 initiated a new approach to regulation of one of the nation's largest and fastest-growing industries, establishing a regulatory model that stimulates competition and efficiency. But, according to this book, the anticipated benefits are proving elusive.For years, competition has been slow to come to this industry, often due to the efforts of government regulators, and federal and state agencies have been slow to implement the deregulation and market-opening processes specified in the new law. This is a mistake, the authors note, because the rapid pace of technological change and evolution of the competitive landscape make it impossible for government regulations to overcome the new economic realities. The situation calls for "a new paradigm of regulation, one that is willing to take risks to achieve larger goals," is "fundamentally optimistic about the ability of a competitive marketplace to bestow benefits on consumers," and implements the rules Congress has already put in place.The authors contend that because market forces created our lead in the international telecommunications marketplace, they are the only way to sustain it. They can even solve thorny problems such as technical standards, universal service goals, and antitrust action. The authors argue that the pace of innovation and the telecom industry's demonstrated capacity to restructure itself efficiently show that the benefits of competition far outweigh the costs of trying to micromanage the industry through regulation.This book will serve as a sound guide to the future of telecommunications and a new standard of regulation that frees industries to do what they do best: make and distribute products people want and need.

Thomas J. Duesterberg is a senior fellow and director of Hudson Institute's Washington, D.C., office. Kenneth Gordon, a consulting economist, has worked at the FCC and as chairman of the public utility commissions in Massachusetts and Maine.