The issue of jurisdiction--"states rights" versus the federal authority--is as old as the United States. In telecommunications, the line is indistinct because interstate communications nearly always involve some intrastate activity. Just as the role of the federal government vis-à-vis the states has reemerged as a national policy issue generally, jurisdiction has emerged as a critical issue in communications policy in the 1990s.
The national direction from the FCC and others has been to favor entry: MCI and others against AT&T; Northern Telecom, Panasonic, and other customer equipment providers against the local phone company's brand; and cable and others against the phone company as regards traffic in the local exchange. States have until recently been less disposed to entrants who want to compete against the local telephone company.
State communications policy is directed by the fifty different public utility or public service commissions. These tribunals are either directly elected or appointed by the governor or legislature. In either case, they are sensitive to the political problems of rising telephone rates. And they have historically been dependent on the dominant phone providers in the state for information necessary for regulation. This has created a policy dispute over entry with the FCC from time to time in some states.
From the federal perspective, uniformity for companies that serve several states makes sense. Indeed, given the FCC's complete assumption of licensing jurisdiction over radio and television stations, a good case could be made for the same treatment for telecommunications providers. (The interstate nature of broadcasting stems from the fact that radio waves can easily travel beyond a state's political boundaries. Intrastate telephone traffic by contrast occurs between two points within the state. Of course, there are many radio and TV stations that do not exceed their states' boundaries, just as there are many so-called local calls, such as those in the New York/ New Jersey or Virginia/ Maryland/ District of Columbia territories, that are in reality interstate.)