Volume 56; 2003-2004 • Issue 1

Table of Contents

Editor’s Note

Articles

TELRIC VS. UNIVERSAL SERVICE: A TAKINGS VIOLATION?
By Stuart Buck
While the Telecommunications Act of 1996 has had a profound positive impact on many sectors of the communications industry in the United States, local phone companies have recently faced a serious dilemma under a provision of the Act known as TELRIC. In this article, Stuart Buck presents a current analysis of the position of the telephone company and its struggle to meet costs under the TELRIC structure. The author argues that by forcing regional phone operators to grant wholesale pricing to competitors under TELRIC, while simultaneously maintaining Universal Service requirements of reduced-rate phone access to remote customers, the local phone companies may be unable to remain profitable. The first section of this article analyzes the history and nature of TELRIC. This discussion is followed by a review of Universal Service Fee requirements from state and federal perspectives. The author concludes by explaining the potential strengths and weaknesses associated with “Takings Clause” lawsuits and the ways in which such lawsuits may prove to be beneficial for struggling telephone companies.

SAY CHEESE: THE CONSTITUTIONALITY OF STATE-MANDATED FREE AIRTIME ON PUBLIC BROADCASTING STATIONS IN WISCONSIN
By Andrew D. Cotlar
Last year, the State of Wisconsin passed legislation which would require statechartered public broadcasting television networks to carry political advertising for candidates free of charge. In this article, Andrew Cotlar raises many concerns about the wisdom of such legislation and the impact this trend may have on public broadcasters throughout the nation. The author begins by analyzing the current position of the law on political access requirements, at both federal and state levels, and then argues that the public television stations should continue to be free to exercise substantial editorial discretion. The Article proceeds to critique the Wisconsin statute as preempted by existing federal law, and contrary to the First and Fourteenth Amendments. The author concludes that legislation like the Wisconsin statue is damaging as an infringement on the principles of public broadcasting, and dangerous if the principle and approach behind it are adopted by other states.

THE ROLE OF EFFICIENCIES IN TELECOMMUNICATIONS MERGER REVIEW
By Calvin S. Goldman, Q.C., Ilene Knable Gotts, and Michael E. Piaskoski
As a result of the recent telecommunications industry slowdown and the rise of globally integrated communications networks, mergers and acquisitions have become a commonplace occurrence throughout the developed world. In this article, Calvin Goldman, Michael Piaskoski and Ilene Gotts review recent merger and acquisition activity and discuss how the decisions to allow or deny “M&A” are viewed by regulatory agencies in the United States, the European Union, and Canada. The first part of this article addresses these three parties’ approaches to M&A consideration and how the concept of “efficiencies” generated by consolidation enters those deliberations. The authors then explore the finer points of “competition review” in the United States, European Union, and Canada and then discuss the individual propensities of these three regulators to consider the proposed efficiencies of telecommunications mergers and acquisitions. The authors conclude that while Canada has been increasingly deferential to proposed efficiencies, and the United States and especially the European Union have remained somewhat reluctant to consider efficiencies arguments, that understanding the complexities of efficiencies review is increasingly critical in the developed world.

IS FEDERAL PREEMPTION EFFICIENT IN CELLULAR PHONE REGULATION?
By Thomas W. Hazlett
While many recent state-level efforts to regulate various aspects of the cellular phone industry have been abandoned in favor of federal regulations, other attempts by state regulators still exist. For this reason, Thomas Hazlett proposes that federal regulation is generally more appropriate than state-level action, due to the nature of the cellular industry. After a brief history of the industry, the author analyzes the pros and cons associated with state and federal regulation. The Article then proceeds to address the efficiencies created by national networks and proposes that the fragmentation of controlling regulatory power would reduce these efficiencies. Following a review of regulatory experiments, the author concludes that federal regulation is most appropriate and efficient, and that further state regulation of the cellular telephony could lead to undesirable balkanization of the industry.

Note

A ROUND “PEG” FOR A ROUND HOLE: ADVOCATING FOR THE TOWN OF OYSTER BAY’S PUBLIC ACCESS CHANNEL RESTRICTIONS
By Thomas Werner
New technological devices which allow consumers to skip commercials are driving corporations to engage in alternative advertising. The development of more “organic” methods of integrating products into the content of television programs makes those advertisements much more difficult to detect. As it becomes more difficult to divorce the product being sold from the content of the program, it also becomes more difficult to determine whether or not an advertisement actually exists. Without such blatant references, these programs would be likely candidates to appear on public access channels. This poses a severe threat to the service that those channels were intended to provide to the public. The influence of advertisers could have devastating impacts on the rights of the public to have meaningful access to the public airwaves. This Note urges states, municipalities, and cable franchisees to include provisions in their cable franchise agreements such as those found in the cable franchise agreement of the Town of Oyster Bay, New York, prohibiting any level of commercial programming on public access channels. It also urges courts take great care in interpreting these statutory and contract provisions so as to minimize the dangers that advertisers pose to the freedom of the public to have meaningful access to public airwaves.

Book Review

COMPARATIVE ANALYSIS OF TELECOMMUNICATIONS REGULATION: PITFALLS AND OPPORTUNITIES
By Mary Newcomer Williams
A review of Controlling Market Power in Telecommunications: Antitrust vs. Sector-specific Regulation by Damien Geradin and Michel Kerf. In this 2003 publication, the authors comprehensively review and analyze the telecommunications regulatory structure of five nations that have achieved some success in promoting competition in telecommunications markets. The authors engage in this analysis in order to evaluate the use of telecommunications sector-specific regulation versus more general, economy wide antitrust regulation to accomplish specific goals related to promoting competition and efficiency in the provision of telecommunications services. This review describes the authors’ analysis and highlights its strengths and limitations. It also offers a few suggestions about the circumstances in which a comparative evaluation of different telecommunications regulatory approaches can be most useful.