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June 16, 2006


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Fabio Polverino

I think this case adds an important piece of evidence to the never ending debate on whether the telecoms market (like any other infrastructure based market) should be regulated through sector-specific regulation or, rather, general competition law.

Regulation is a tool capable of being finely tuned on the policy needs, but is slow-paced (incapable of timely tackling technological issues), while competition rules are fast and flexible, but sometimes too generic (plus, they are only applicable ex post, once an infringement is alleged).

This case seems to show that competition law would have got to the same place as the Telecommunication Act (and the court), just in a shorter time.

It is possible to imagine, in fact, that under something like the essential facility doctrine (rejected by the Trinko court) or a refusal to deal theory, a CLEC would have gained access to the incumbent's network in a time shorter than 10 years and with a minor burden on the judicial system.

Plus, since a suit for access to an essential facility or refusal to deal would only succeed when no viable alternatives are available to the new entrant, the presence of a wi-fy/cable network would have also played a decisive role (which did not happen in this case).

My reasoning might seem flawed, since the EU also adopted an unbundling regulation (rather than resorting to competition law), but I want to point out that such regulation, a very reduced body of rules, was enacted only in 2000, two years (ages for the IT/telecom market) after the liberalization in the telecom sector (1998) and still poses burdensome problems for its full application.



This seems to me the type of law that your colleague Adrian Vermule would say the courts should take a pretty deferential approach with and just leave it to the agency. Others, most notably Bill Eskridge, have argued that Adrian is too enamored with agencies and that the current state of affairs is about as good as we can do. The problem with debates of this nature are that they often abstract from actual legal disputes. I trust your judgment on this (it is certainly better than mine!), so does the travails of this law add support to either side. In other words, if courts had quickly blessed the first set of regulations, would that have been a better outcome (and I'll even let you define what constitutes "better").

Randy Picker


Yes, some Chicago configuration started to write a paper saying exactly that (I think that I have a partial draft somewhere by Lichtman, Picker and Sunstein). This was an experiment, and the uncertainty over the rules was mucking up the experiment. Far better to run it and see what we might learn. Fighting over the rules meant that we couldn't learn anything cleanly. So yes, pick a rule and quickly and let us see what happens.

Instead, we fought about the rules for a decade and in the meantime the tech landscape moved on (wireless and cable, so-called intermodal competition).

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