The Making of Energy and Telecommunications Policy

AT&T. Major issues such as the nature and extent of competition and the restructuring of the telecommunications industry were settled by the Consent Decree. The policy debate then shifted and narrowed to the question of the impact of divestiture, and later to the impact of the access charge decision on local rates and the long-standing goal of universal service. In this sense, it was a debate which went nowhere.

In earlier phases of the debate, Congress had been stymied in determining what action it should take by its perceived role as an uninformed interventionist. For example, many members of the key congressional committees did not fully appreciate the meaning and significance of the cumulative record of FCC administrative rulings and court interpretations of these rulings. In the aftermath of the divestiture and the access charge decision, Congress was stymied by uncertainty over whether and how it should act to preserve universal service. It was apparently concerned that it might well do the wrong thing. This uncertainty contributed to Congress playing a major role as a prodder (of the FCC), not as an effective policy initiator.

The congressional role was made somewhat difficult by the way in which the debate over universal service was defined. The issue was defined as a choice between completing the move to rational, cost-based pricing and the enhancement of economic efficiency as a means of promoting universal service, or a return to uneconomic cross-subsidization of local rates by interstate rates, with a significant risk of imperiling universal service by encouraging bypass of the local exchange by high-volume users. That the debate did not become a rancorous standoff between these two perspectives is perhaps testimony to the fact that universal service was a well-institutionalized and widely supported social value. Neither industry participants nor government officials wished to bear the blame for having dismantled universal service. Thus, although the argument for cost-based pricing and economic efficiency was proffered as an important value and was heeded in policy formulation, the argument was not advanced in an effort to delegitimatize the policy goal of universal service. However, many service providers sought to redefine universal service. The MFJ was structured in a manner which permitted the FCC to play a key supporting policy role in imposing the access charge plan, a plan the FCC had been working on for some time. Thus, the FCC continued its pattern of making major public policy by accretion. Congress remained unable to check the FCC's initiative in this regard.

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