Supreme Court Trinko Case Could Disrupt Telecom Markets,
WASHINGTON, D.C. - Will there be a reversion to the days when telecommunications was micro-regulated by antitrust law, as under the AT&T consent decree? Probably not. But a case heard this month by the U.S. Supreme Court could put antitrust law and the 1996 Telecommunications Act on a collision course. According to legal and policy expert William F. Adkinson, Jr., the industry and consumers should be wary of the decision because its effects could be wide and enduring.
In a study released today, “Verizon v. Trinko: Reconciling FCC Regulation and Antitrust Enforcement,” Adkinson maintains that the most prominent and contested issue in Trinko and several related cases concerns whether plaintiffs should be allowed to assert antitrust claims against former Bell companies for alleged denials of interconnection or other conduct pertaining to obligations under the 1996 Telecommunications Act.
“Plaintiffs should not be permitted to assert antitrust claims against ILECs based on alleged denials of interconnection or other conduct subject to obligations under the 1996 Act,” Adkinson writes. “Such claims are negated by the regulatory system, which imposes far more extensive obligations on ILECS than the antitrust laws ever could.… Indeed, permitting CLECs or retail customers to bring antitrust actions will interfere with the access system established by the 1996 Act.”
Adkinson, who is senior policy counsel at The Progress & Freedom Foundation, believes antitrust law is necessary and “represents the default alternative to direct government regulations.” But, he writes that it “must be properly applied – avoiding undue intrusion into decision-making by individual firms and relying on market transactions and competition to promote consumer welfare.” According to Adkinson, “Until [Congress] fundamentally changes the regulatory system, the role for antitrust actions will be severely circumscribed.”
In the meantime, the decision will be handed down during the current term, and Adkinson warns of significant consequences: “The resolution of these complicated policy issues is of intense practical importance – they will significantly affect the cost and quality of local telecom services that play a central role in our lives and the U.S. economy,” he writes. “They will impact…the crucial rollout of the next generation of broadband services.”
The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.