European Union Mobile Telecommunications Policy and the Communications Act of 1934: Can Congress Avoid a Collision on the Information Superhighway?

By Morse, Robert G. | The George Washington Journal of International Law and Economics, January 1, 1995 | Go to article overview

European Union Mobile Telecommunications Policy and the Communications Act of 1934: Can Congress Avoid a Collision on the Information Superhighway?


Morse, Robert G., The George Washington Journal of International Law and Economics


I. INTRODUCTION

The United States and European Union (EU)1 are currently drafting and implementing new policies in preparation for the next generation of mobile communications technologies.2 The promise of the mobile communications service industry has already prompted numerous transatlantic ventures in both the United States and Europe.3 Given the high costs of acquiring a common carrier radio license4 and constructing a mobile communications network,5 investors and companies will continue to look across the Atlantic from both directions for new markets and financing. The United States and European Union Member States (Member States), however, have traditionally restricted foreign interests, be they foreign individuals, corporations, or foreign governments, from obtaining common carrier radio licenses within their borders.6 Both the European Commission (Commission) and the U.S. Congress have recently recognized the tension between market realities and protectionist policies and have attempted to update their licensing procedures to ease that tension.7

The Commission brought attention to foreign investment restrictions in April 1994, when it published a Green Paper on a Common Approach in the Field of Mobile and Personal Communications in the European Union (Green Paper).8 Consistent with its prior actions regarding third-party access to the European telecommunications market, the Commission proposed that Member States have discretion to restrict access for those non-Member countries that do not provide Member States reciprocal access.9 The Clinton administration, Congress, and the Federal Communications Commission (FCC) have responded by setting forth reciprocity proposals of their own.10

This Note discusses the extent to which Congress should revise section 310 of the Communications Act of 1934 (Communications Act),11 the statute governing FCC licensing procedures, to accommodate foreign investment in common carrier radio licenses. In determining the appropriate U.S. approach, this Note first discusses the characteristics of mobile communications technologies, some of which will impact governments' ability to genuinely liberalize their markets. Next, this Note discusses the current state of the EU's and United States's mobile communications industry, followed by a review of recent EU efforts to liberalize its mobile communications sector. This Note next provides an overview of U.S. foreign ownership restrictions and licensing procedures, as well as a summary of changes proposed by the 104th Congress. This Note then identifies important policy goals to be considered in determining appropriate changes in U.S. licensing procedures; in particular, this Note discusses whether the legislative proposals before Congress in 1995 adequately incorporated those policy goals. Finally, this Note submits a number of additional legislative recommendations.

This Note argues, as a general matter, that the House and Senate proposals to lift U.S. restrictions on a reciprocal basis reflect the proper approach to the challenge posed by the Green Paper.12 A reciprocity approach also satisfies a variety of policy objectives, including opening the U.S. market to foreign investment, protecting legitimate national and economic security needs, and promoting various objectives of the Communications Act.13 The extent to which each legislative body adequately addressed those objectives varies, however, and certain legislative proposals may have unintended consequences; namely, unduly undermining U.S. efforts to open mobile communications markets abroad or subjecting foreign companies to arbitrary regulation.14 Either approach reflects a marked improvement over the provisions of the original Communications Act.15

II. BACKGROUND

A. Personal Communications Services Technology

The new generation of mobile communications technologies, known internationally as "future public land mobile telecommunications systems" (FPLMTS), encompasses a variety of different technologies and communications services. …

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