Court Rules in Favor of Telecom Deregulation

Court Rules in Favor of Telecom Deregulation

Strikes Down FCC Price Controls of Telephone Networks
March 01, 2004

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Richard Morrison, 202.331.2273


<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />March 2, 2004



Statement of Braden Cox

Technology Counsel

Competitive Enterprise Institute



The District of Columbia Circuit Court of Appeals today invalidated much of the Federal Communications Commission’s rules that force telephone carriers to lease their networks to rivals at government-mandated prices.  This decision is an important victory for consumers and free markets.  Companies will now have greater incentive to invest in infrastructure, which will in turn accelerate job growth and innovation.


The court determined that the FCC’s delegation of decision-making authority to state public utility commissioners was unlawful.  The court also upheld the FCC rules that did not mandate competitor access to broadband networks.  The court, however, did determine that the FCC had reasonably justified that unbundling of broadband would “skew investment incentives in undesirable ways” and that competition from cable companies provides significant competition within the broadband market.  This is the FCC’s third attempt at interpreting the 1996 Telecommunications Act that has been struck down by a federal court.