Law and Regulation of Common Carriers in the Communications Industry

By Daniel L. Brenner | Go to book overview

2
TITLE II REGULATION

DEFINITION OF COMMON CARRIER
If the FCC determines that a firm is a common carrier, it has the authority to require that firm to submit to entry and exit regulations. That is, it can determine when a common carrier may enter and withdraw from a market and has control over what prices it may charge. Such regulations can decrease profitability, because public-utility-type rate-based regulation assumes that the utility is a monopoly and will charge prices yielding supranormal profits unless restrained by government. Rate-based regulation also adds a cost to the firm of producing data for regulatory monitoring and slows down business activity. The FCC has questioned the traditional assumption that common carriers are always capable of charging consumers a monopoly price.The Commission's method of defining common carriers has undergone substantial revision over the last decade, evolving as technology has advanced, as competition has increased among telecommunications firms, and as the Commission has come to redefine the purposes of the Communications Act. The FCC began the 1970s with a common carrier analysis based on a firm's functions but gradually turned to an economic analysis of an individual firm's ability to exert market power--that is, to effectively charge consumers a monopoly price.The Communications Act defines a common carrier as "any person (1) engaged as a (2) common (3) carrier (4) for hire, in interstate or foreign communications by wire or radio or interstate or foreign radio transmission of energy, . . . but a person (5) engaged in radio broadcasting shall not, insofar as such person is so engaged, be deemed a common carrier." This definition has been criticized as "circular" and as "not meaningful." The circularity in the statute allowed or even required the FCC to rely upon the common law of common carriage before it adopted economic analysis. Consider each element of the statutory definition.
1. Engaged in communication: All messages transmitted by wire or radio, even if of rudimentary informational content, come within the common carrier definition. Indeed, Section 203(d) of the act merely requires the "transmission of energy by radio," all else equal, for a firm to be considered a common carrier.

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Law and Regulation of Common Carriers in the Communications Industry
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • Preface ix
  • 1 - Public Utility Theory 1
  • 2 - Title II Regulation 45
  • 3 - Federal/State Jurisdiction 63
  • 4 - Statutory Requirements: Just and Reasonable"; "Unreasonable Discrimination"" 79
  • 5 - Dominant/Nondominant Carriers; Forbearance 96
  • 6 - Price Caps 116
  • 7 - Divestiture of the Bell System 159
  • 8 - Line of Business Restrictions 168
  • 9 - The Local Exchange: Access and Competition 186
  • 11 - International Telecommunications 274
  • 12 - Privacy 283
  • 13 - Convergence 299
  • Appendix A: Telecommunications Glossary 311
  • Appendix B: Communications Act of 1934 317
  • About the Book and Author 348
  • Case Index (principal Cases) 349
  • Index 351
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