The U.S. Court of Appeals recently handed down a verdict requiring the FCC to develop new rules for the “un-bundling” of the Baby Bells. Since the Telecommunications Act of 1996, the FCC has attempted to force the Baby Bells to open their equipment so that competitors could offer phone service without having to build a network. Instead of fostering healthy competition, this policy has stifled innovation and, in some cases, forced the Baby Bells to operate at or near loss on local phone service.
The FCC has 60 days to act on this decision and instill new rules that would encourage growth. If all telephone companies - Bells and entrants alike - invest in new infrastructure, then investment and jobs will necessarily follow.
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This article appeared in its entirety in the March 18, 2005 edition of National Review.