Volume 50; 1997-1998 • Issue 1

Table of Contents

Editor’s Note

Articles

Property Rights, Reliance, and Retroactivity Under the Communications Act Of 1934
By William L. Fishman
Although the FCC and courts have concluded that licensees have certain property interests in their licenses, they do not acquire any ownership interests even when, via a spectrum auction, they pay for their licenses. What narrow property interests licensees maintain are limited, and the FCC has broad power to modify existing licenses if doing so is in the public interest. License owners have sought to limit or defeat otherwise lawful FCC actions to alter their licenses by asserting a reliance interest on prior agency action or policy. Licensees may find comfort in the fact that some courts have acknowledged these claims, and have determined that the FCC, at a minimum, must treat licensees equitably. It is proposed that, even in the absence of traditional property rights, such claims be available to facilitate careful judicial review of FCC action.

The Information Superhighway: Trolls at the Tollgate
By Charles M. Oliver
Prior to the passage of the 1996 Telecommunications Act, policymakers sought funding and regulatory mechanisms capable of fulfilling the vision of an Information Superhighway. Vice President Gore, the Clinton Administration’s point person on the issue, initially proposed assessing fees on other sectors of the telecommunications industry to fund construction. Meanwhile, conservatives asserted that deregulation of the industry would achieve the desired result. A compromise ultimately was reached: the 1996 Act requires local exchange carriers to unbundle their networks and provide access at a reasonable cost to competitors. The use of regulatory formulas in lieu of taxes to subsidize a national vision is not new, but must be recognized and restrained. Policymakers should estimate the budget for the entire proposal and then decide how to assess costs among targeted beneficiaries in an open and accountable fashion. Using Market-Based Spectrum Policy To

Promote the Public Interest
By Gregory L. Rosston & Jeffrey S. Steinberg
With the increasing demand for spectrum to accommodate emerging technologies, and the discovery that higher frequencies are usable, the FCC has replaced its reliance on administrative mechanisms for allocating spectrum with a more flexible, market-based approach. The FCC can best accomplish its mission of promoting the public interest by continuing to rely on competitive market forces and by establishing a clear and consistent paradigm for approaching allocation, assignment, usage, and other policies. Such a paradigm envisions an FCC that would actively monitor spectrum to remedy situations in which it is not used to its full value; establish mechanisms to reduce new services’ need for immediate secondary market transactions; set and enforce minimally restrictive baseline rules governing interference and health effects; maximize the amount of spectrum available to users; and, in some cases, intervene in markets to correct significant market failures.

International Jurisdiction in Cyberspace: Which States May Regulate the Internet?
By Stephan Wilske & Teresa Schiller
The Internet now reaches 60 million users in 160 countries, with the number increasing each year. Although cyberspace has been viewed as a self-regulating entity controlled by no government, this myth is being destroyed as the global Internet community expands. With this expansion comes a question: Who has the authority to regulate cyberspace? Given that decisions about the Internet reach far beyond national borders, the answer to this question is unknown, but certainly has broad implications. Traditional laws of international jurisdiction, including jurisdiction to prescribe, jurisdiction to adjudicate, and jurisdiction to enforce, offer some clear answers. However, further development of these laws will be required in order to solve inevitable conflicts. For the time being, Internet users should be aware that the consequence for a few keystrokes is uncertain and possibly severe.

The Telecommunications Act Of 1996: Codifying the Digital Divide
By Allen S. Hammond, IV
The Telecommunications Act of 1996 purports to ensure every American eventual access to advanced telecommunications networks and services, and more immediate access to basic telephone networks and services. This access is essential because it determines the ease with which Americans can acquire an education, obtain employment, control financial affairs, access emergency assistance, and participate in the political process. The interpretation and implementation of the 1996 Act is critical because there is an imminent danger that a large portion of society— in inner cities, near suburbs, and small towns— not be connected to the “national electronic nervous system.” To ensure that more Americans are technologically empowered, it is suggested that telecommunications discounts be extended to eligible community based organizations and urban health care providers.

Notes

All Wired Up: An Analysis of the Fcc’s Order to Internally Connect Schools
By Roxana E. Cook
The Telecommunications Act of 1996 extends universal service support to schools and libraries. Pursuant to this legislation, the FCC has provided all eligible schools with discounts of between twenty and ninety percent on telecommunications services, Internet access, and internal connections— to a 2.25 billion dollar annual cap. Critics have denounced the subsidy for internal connections as unsupported by the Act’s language and outside the FCC’s authority. However, based on a plain reading of the statute, on case law, and on legislative history, it is clear that the FCC properly exercised discretion in allocating the potential fund.

Universal Service in the Schools: One Step Too Far?
By Christine M. Mason
Universal service is extended to include new recipients, such as schools, as a result of the Telecommunications Act of 1996. The FCC should proceed cautiously, and maintain its commitment to the traditional goal of universal service— Americans with basic telephone services— carrying out this new mandate.

Section 254 of the Telecommunications Act of 1996: A Hidden Tax?
By Nichole L. Millard
Congress has the sole power to levy and collect taxes. The Supreme Court has ruled that Congress may delegate this authority to administrative agencies so long as the will of Congress is clearly defined in the legislation. However, section 254 of the Telecommunications Act of 1996 operates as an unconstitutional delegation of Congress’ authority to tax. This legislation provides the FCC with unfettered discretion in defining the boundaries of universal service and the authority to mandate that all consumers of telecommunications services subsidize the cost for low-income and rural consumers, as well as schools, libraries, and health care providers.

Book Review

Universal Service: Competition, Interconnection, and the Making of the American Telephone System, By Milton L. Mueller, JR.
By Clayton C. Miller