Double Trouble for US Telecoms
DOUBLE TROUBLE FOR US TELECOMS
[SOURCE: Financial Times, AUTHOR: Richard Epstein, University of Chicago]
[Commentary] Like it or not, extensive government regulation of high- technology industries is here to stay. That is especially true of network industries, which are not amenable to competitive solutions. Someone has to decide what form of regulation best combats the risk of monopoly exploitation of a dominant network position. The two competing forms of regulation are direct administrative scrutiny and competition (or antitrust) law. Much can be said for and against both types of regulation. The administrative process is costly and cumbersome. The aggressive imposition of low rates and harsh terms can easily retard technological innovation or drive the regulated firm to the edge of bankruptcy. Competition law for its part offers imaginative lawyers a hunting licence to attack the innocent practices of dominant firms, with huge fines the norm in the US and Europe. There is only one thing worse than having to fight either administrative regulation or judicial enforcement of competition law: fighting on both fronts simultaneously. Yet that fate is common today, especially in the US. Regulation proponents defend dual enforcement on the grounds that the one form of regulation can pick up any slack left by the other. Many defenders of regulation like the idea of duplication so much that they support both national and state enforcement in the US, and European Union and national enforcement in Europe.
http://www.ft.com/cms/s/2f0e6bae-1dc6-11dc-89f7-000b5df10621.html
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