Exporting U.S. Telecom Policy: The Case of Local Telecommunications

Robert W. Crandall


The passage of the 1996 Telecommunications Act and its subsequent implementation by the Federal Communications Commission (FCC) has provided U.S. trade authorities with a blueprint that it believes is the sine qua non for opening telecommunications markets around the world. But just because the U.S. was among the first to liberalize its telecommunications sector, it is far from clear that it has a monopoly on the route to competitive markets. Indeed, it is my belief that time will expose the U.S. policy towards opening local telecommunications markets as being far too complicated excessively regulatory. In particular, the renewed emphasis on cost-based regulation is surely misguided, and it is even likely the requirement that incumbents share their networks with entrants will simply not work. It may be somewhat early to try to render a definitive verdict, but I believe that the American experience with local telecom market liberalization is far from the successful model that U.S. trade authorities apparently believe it is.