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The Communications Act of 1934 created the Federal Communications Commission to regulate interstate and foreign common carriers and established the Nation's policy goal of making communications services available to all people of the United States (referred to as the Universal Service Mandate). The carriers have interpreted this mandate to mean that other telecommunications services should cross subsidize local telephone service. To achieve this, the American Telephone and Telegraph Company and the independent telephone companies adopted specific pricing policies and methods of distributing common costs which they assert subsidize the cost of local service and, therefore, widen its availability. The carriers believe that the goal of universal service is in jeopardy and that competition threatens the subsidies to local service. This, in turn, threatens to raise the cost of local service, contrary to the Universal Service Mandate. However, studies conducted by FCC, the industry, and other experts cannot provide a definitive answer on exactly which subsidies exist, how large the subsidies are, and what competition's effect will be. Despite this controversy, industry observers and the carriers agree that the goal of universal service has been satisfied. While only about one-third of the Nation's households had telephone service at the time the act was passed in 1934, 95 percent have it today. Consequently, in evaluating future policy goals the Congress faces the issues of what amount of industry regulation is needed, what type of industry structure should be adopted (monopoly or competitive), and what domestic telecommunications policy goals the Nation should pursue.
This revised casebook-plus-commentary offers a basic introduction to the traditional regulation of telephone companies as well as the new lines of businesses they have entered. Drawing on historical and contemporary court decisions as well as on FCC and legislative materials, Brenner documents and evaluates the past twenty years of regulation of the telecommunications industry. In particular, he traces the major regulatory changes from the time of AT&T's single-firm dominance to the increasingly competitive marketplace of today. The law and literature necessary to understand the development and trends in telecommunications are voluminous and, up until now, have been difficult to locate in one place. This book presents the critical concepts and shifts in communications policy coherently and concisely. In this revised and expanded edition, Brenner provides excerpts and comments upon the key decisions in the field, ordering them in a readily accessible manner. He assumes no specialized background in technology, law, or economics. Brenner provides an ideal introduction to this increasingly important field for professionals as well as for scholars and students interested in communications and communications policy.