the politics of the telecommunications policy process : the example of the fcc's price cap...

The Politics ot the TelecommunicationsPolicy Process: The Example of the FCC's PriceC ap (nitiative

Peier SmeUs

Almost four years after the tx'eakup of the Bell system m January 1984, thethomv issue of pricing in the telecommunicauons industry emerged at the top of thepolicy agenda m Washington In July 1987, the US Departmem of Commerce'sNauona! Telecommunicauons and Informauon Administration (NTIA) released arcpon on alternatives to rate-of-retum (ROR) regulation (National Telecommuni-cauons and Informauon Administration[NTlA], 1987) NTIA concluded that the"social contract" or "pnce cap" t^tton was the most ^profxiate regime forregulating AT&T Several weeks after the release of the NTIA report, the FederalCommunicauons Commission (FCQ proposed pnce caps (Federal Communica-tions Commission [FCC], 1987) In the ensumg months, the proposal elicited thenoisy intervention of numerous stakeholders perceiving themselves as losing out orgaining from the proposed regime On March 16, 1989, after a penod of horsetrading between stakeholders, the FCC changed its method of regulating long-distance rates The new method, which took effect, July 1, 1989, gives AT&Tfreedom to set long-distance prices, subject to pnce caps set by the commission

This article has three objecnves First, taking the pnce cap issue as anexample, the neglected pohucal dimension of the telecommunications pohcymakingprocess is explored (Le Due, 1987, Mosco, 1988) That this process is pohncalwould seem self-evident (e g , Derthick & Quirk, 1985, Gormley, 1983, Meier,1985, Robyn, 1987) But, as Krasnow, Longley, and Terry (1982) note, thetelecom municauons policy process "is often portrayed as if it takes place withm acosy vacuum of 'adminisU-auve independence ' In reality the making of [telecom-municauon policy | by the FCC, an ostensibly lndepwident agency, is an intenselypohucal process—not incidentally, as an aberrauon, but by its very nature" (p 9)Amall and Mead (1984) complain that' the regulatory literature usually assumesthat regulaucms were decided for the reasons stated m the official decisions—or atleast by some intellectual process In fact the pohucal process stirroundingdecisionmakmg matters just as much" (p 38)

Second, special attenuon is given to the dynamics of the FCC-Congressrelauonship Shooshan and Krasnow (1987) lament, "the FCC' s mdependent slamshas been subtly transformed to a level of abject dependency on its relauonship withCongress" (p 619) For them, this process must be arrested and rolled back (see alsoJones, 1989. p 24) The FCC's pnce cap mmauve provides an (^)portumty to testtheir claim

Third, f mdings of the case study are related to the hterature on the poliucsof regulatory policy, parUcularly those works focusing on the relauonship betweenekxted officials and agency bureaucrats Iliere are two competing views cm this

Policy Studies Journal, 19 3-4

nelaticxiship, the "pnncipal-agent" and "bureaucr^c politics" perspectives (Eisner& Meier, 1990) The former suggests that Congress in general, and ovCTSightcommittees of Congress in particular, dominate the regulatory policy process(Calvert, Moran, & Weingast, 1988; Fionna, 1977; Mayhew, 1974). In this view,members of Cwigress gain leverage over bureaucrats through infomal insight,using such tools as decentrahzed information gathoing (NfeCubbms & Schwartz,1984, Weingast, 1984) and administrative procedures (McCubbins, 1985,McCubbms, Noll, & Wemgast, 1987) to guarantee the relevant legislative consutu-ents are well served.

B y conD:ast, the bureaucratic pohucs p^specti ve emphasizes the seeminglmperviousness of agency bureaucracies \o external control (Katzmann, 1980,Niskanen, 1975; Wilson, 1980). Rourke (1984) locates the source of agency powerin four resources experuse, pohucal support, vitabty and leadership. Therelabveautonomy of the agency is a funcuon of the mto^tion of these f£K;tcvs Thus, morder to understand pohcymaking one must undo'stand bureaucrauc discieuon inacuon.

In order to get to the heart of the pohcy process, the following steps areadhered to.

1. Descnpuon of the pnce cap opuon and explanation of why this opucmrose to the t<^ of the policy agenda

2. Exammauon of the pncecappohcy debate. This mvolves ldenbficatitxiof the mam actors or stakeholders in the policy arena, examming the posiuon takenby stakehold^s, highhghting the methods by which the various positions areadvanced, and c£^turing ^ e way in which actors adapt their posture to a changingpobcy envm)nment

3 Discussion of why the pnce cap pohcy, which many industry observersccxifidently predicted would move smoothly to the (^rational stage, was almostshelved

Price Cap Regulation

The basic idea of pnce caps is that the regulated telecommunicationscompany is given pncing freedcnn for most service offerings tn exchange for apromise to limit rate mcreases for a few basic services to a predetrainined amountRate increases for basic services are usually linked to the consumer pice index(CPI) or other yardsticks of lnflaUon (Littlechild, 1983; Johnson, 1989). In theUnited Kingdom (U.K.), w h ^ pnce cj^)s operate, Bntish Telecom (BT) isp^rnitted only limited rate increases for a "basket" of basic exchange services whilebeing iiee to set pnces for other service offenngs Basic services oue increases aregoverned by the equation RPI-3, where "RPI" represents the retail fffice md&x and" 3 " represents an estimateofthe expected productivity gams deemed possible atBT(Bhattacharyya & Laughhunn. 1987, p. 24; FCC. 1987)

The FCC's initial pnce c ^ proposal concluded that consumers wouldbenefit from pnce caps because it would p^mit the earner (AT&T) to retain scwne

496

Symposium on Wildlife Cnn^er^auon and Public Pohcy Shields

profits ansing from mcreased efficiency or t reativUy Pnce caps, it is argued, wouldencourage greater etficicncy and innovation than exists now, especially in lesscompetitive markets The approach would decrease incentives to shift costs frommore to less compeutive service offenngs Rules governing the penodic revision ofthe caps could reduce, if not eliminate, incenuves to inflate rate bases In keepingwith the White House's dnve in this dirccuon, ihe FCC suggested that pnce caps

could also reduce the resources competitors feel compelled to commit toparticipation m the admimstranve process This would permit than tobnng to competition m the marketplace resources they now havediverted to competition in judicial, regulatcrv' and pohtical arenas(FCC. 1987, p 5214^

Why did the Price Cap Option Emerge on the Policy Agenda?

The standard explanauon for why pnce caps emerged on the policy agendaof the FCC IS ecMiomic and technical in nature (e g , BhaUacharyya & Laughhunn,1987, FCC. 1987, NoU, 1987) It is argued thatROR regulauon has sevwal senousdefects These range from perverse management lncenuves related to technological]nnovau<Hi, new services, and efficiency, to the "cost plus" mentality it imposes onmanagement, and to the high cost of administration it imposes on regulators andmanagement alike

Furthermore, the FCC faces the dilemma of applying ROR regulauon toa firm which offers regulated and deregulated services When providing both typesof services, the firm has the opponunity to underpnce m its competiu ve markets topumsh actual or potential nvals Losses incurred in this acuvity are recouped byovercharging consumers in monopoly markets (Johnson, 1989, Noll, 1987, Pmnck,1987) Tlius, the central issue is \o find a regulatory scheme that gives a regulatedfirm the freedOTi to compete on an equal basis with its nvals while preventmg pnceabuse Aftea- c^^ful study of altemauves, pnce caps emerged on the policy agendabecause of its perceived technical supenonty in addressing this dilemma

While economic and technical factors play an important role in thrusungpnce c ^ s on to the pohcy agenda, this is only part of the story Contentions thatROR regulation is anachronistic and that pnce caps is technically supenor arevigorously contested, therefore suggesting other factors have placed pnce caps onthe FCC policy agenda (Trebtng, 1988).

Derthick and Quirk (1985) assert that a procompetiuve deregulatorychmate has existed in the U.S for the best part of two decades Referring to thetelecommunicatioas mdustry. Melody (1987) disagrees He convincingly arguesthat the so-called procompetiuve policies of the 1960s and 1970s were in factgrudgingly COTceded by the FCC (p 1 *i) Melody suggests that in the 1980s therewas a pohcy shift at the FCC

49:


The real meanmg of deregulauon at the FCC is regulation that has beenredirecred to different purposes The FCC's regulatory attentionhas come to focus upon the task of facihtating the entry of AT&T and

other major US transnational corporauons into foreign markets inteleccmmumcation equipment as well as communication and informa-tion services The [FCC] is actmg more and more like a cartel managerseekmg to provide competitive advantages for its chents mdomesuc andmtemational markets (Melody, 1987, p 35)

The FCC's access charge policy can be int»preted as enhancing the roleof U.S. industry at the global level. The policy shifted a major portion of theccxnmon costs of the local exchange network from long-distance and specializedservices to the basic monopoly telephone service This would improve thecompetitiveness of U S transn^onal cixporations in both U.S. and intematiCHialmarkets (Melody, ] 987, p 35)

The emergence of pnce cap must be understood in the context of the FCC' sshifting role Pnce caps may lead to the enhanced competitiveness of the telecom-munications industiy, particularly AT&T. Indeed, AT&T Vice Chairpwson CMarshall praised the FCC's proposal to replace ROR with pnce caps- "Amenca'sperformance m international markets is being hamstrung by 'deregulatory drag'.. [RJate-of-return regulation, under which AT&T now operates, is anathema tocreating an entrepreneurial spint, and had to be blamed in part, for Amenca'swaning trade position and growmg trade deficit" {Telephony, February 1,1988, p9)

At the FCC, pnce cap was most strongly endorsed by Chauman DennisPatnck, Commissioner Mimi Dawson (Republican), and the Commission's OfficeofPlansandPolicy(Coffim«mca/wnsZ)(M/}',August5,1987,p 3) In an interviewwith the journal Telephony, Dawson made it clear that the pnce cap fvoposal wasPatiick's initiative {Telephony, February 8,1988, p. 39)

Patnck's uimauvecan be viewed in relation to the movement afoot, at theend of 1986, to find alternatives to ROR At a symposium in Decemb^ of 1986,Patnck a u ^ an alternative way of regulating AT&T In a measured statement, heargued:

I am Tiot now proposing that we scrap raie-of-Fetum regulation immedi-ately Alternative regulatory structures pose a numbn of quesuons,many unanswered I do propose, however, that we candidly assessalternative methods for intea'state regulation in the future Onepossible alternative th^ I think deserves public attenuon and debate isthe so-called pnce cap approach (Patnck, 1987, pp 12-13)

Patnck's atU'action to pnce c^)s was sh^)ed, m part, by the variants ofpnce cap adopted m several states and in the U.K. (Patnck, 1987,p 13;FCC,1987,pp 5212-5213)

W e ^ s after PaUick offered these suggestions, the NTIA began wadingthrough responses to its inquiry on ROR regulation. The NTIA sought comments

498

Symposium on Wildlife Conservation and Public Policy Shields

on three alternatives the social tontract m which all services are deregulated andlocal rate increases are tontiôlled, banded rates in which rês can be raised OTlowered withm established limits, and the market basket apiôach in which overallpôrmance is compared to a "basket" of comparable nsk firms, with excess profitsubject to refund {Telephony, December 29,1986, p 18)

On February 5. 1987, President Reagan announced the appointment ofPatnck as FCC Chairman Patnck was aware there were 18 months or so unul thenext presidCTtial election and a possible change in thepolmcal colors of the ensuing^ministration Furthermore, ii was apparent to Patnck that he would have thesupport of majcH* players in the telecommunications mdustry For example, AT&Thad been encouragmg states such as New Jersey and New York to adopt pnce caps(Seghers, 1987, p 88), apparently m order to develop good examples to cite beforeih£FCC{Commumcations Daily July ] 7,1987. p 5) In addition, Patnck and hissupporters at the FCC would have been aware of the comments which vanousinterested parties had submitted to the NTIA inquiry It was apparent from thesecomments that AT&T and the local exchange earners (LECs) favored pnce caps

In seeking to accomphsh his objective before the end of 1988 (end of theReagan Administrauon), Patnck must have believed there would be no senousattempts to thwart pnce caps This assessment was especially relevant wiih respectto Congress which mrecent years had devised means of obsuiicUng FCC proceedings(Shooshan & Krasnow, 1987) Former Commissioner Dawson corroborated thatthis assessment had been made She noted that even after the first comments on theproposal, and after the FCC had given testimony at the first round of congressKMialhearings, there was no sense at the FCC that Congress would obstiTKt pnce caps{Telephony, February 8,1988, p 39*

Price Caps: The First Proceeding

In Its Notice of Proposed Rule Making (NPRM), adopted August 4,1987,the FCC outlined a isice caps regime, but left the details to be determined afterpublic comment In essence, "basic" lnterststte service pnces would be set at aspecific level to be adjusted penodically based on predetermined factors beyondAT&T's control, such as inflation The FCC wanted input on such quesuons as Atwhat levels should pnce caps be set** Should they be averaged or should each servicehave Its own'' How often should they be reviewed'' What factors should be takeninto account when raising or lowenng pnce ceilings'* Should pnce caps be ued toecon(Mnic indicators'* Comments received by the FCC mirrored, to a large extent,those filed with the NTIA (1987) A major difference, however, was that on releaseof the FCC's proposal. Congress emerged as a major actor

Examination of reactions greetmg release of the FCC's proposal revealstwopoints First, two opposing schools of thought emerged conceming the natureof the proposal House Energy and Commerce Committee Chairman John Dingell(Democrat) aigued that the FCC proposal was vague and that "without additicHialsafeguards, its proposal could merely allow long distance companies to re£ûnregulated windfall profits " House Telecom municaUon Subcommittee Chair-

499

Pohcy Studies Journal, 19 3-4

man, Edward Markey (Democrat), argued that the FCC was"[continumg] Its assaulton the Amencan consumer by {s^posing to significantly loosen its regulation of alldominant i»t}viders . that this dêgulatoiy effort [would start] by releasing themonohthic AT&T from rate-of-retum regulation . . Do^gulaung long distanceservice is parucularly troubhng, because this is a dechnmg cost industry" {Commu-nications Daily, August 5, \9S7,p 4)

Responding, FCC Commissicmer Dawson argued that the proposal wasnot mtended to deregulate AT&T or the LECs, noting that "caps could be moreonerous than rate-of-retum regulation if appbed improperly" (emjriiasis added)Dawson charactenzed the proposal as "an explcH^tion of a more effective way toregulate " FCC Chairman Patnck descnbed the proposal as "proposing to changethe method by which we regulate the rês of basic services provided by dominantcarr^rs." The approach "holds out the promise that dommant telephone ccHnpanieswill be providing better service to the Amencan ratepayer at a lower i»ice than rate-of-retum would permit" {Communications Daily, August 5,1987, p. 3).

Thus, two opposing views emerged on the nature of pnce caps Is itderegulation in the sense that restiictions are lifted from AT&T? Altematively, isIt simply regulation of a different kind in the sense that one set of restnctions aresubstituted for another set'' Certainly, the form^ interpretation would have been inline with current White House thinking Interestingly, both Patnck and Daws(Hiplayed down the NPRM's conclusion that a potential benefit of pnce cap would bethe alleviation of the administrative burden of ROR regulation Dawson's remaiJcsare particularly puzzling, did she not intend that pnce caps be implemented"properly" and consequently be less onerous than ROR? Roger Noll, a prominentacademic in support of pnce caps, implied Patnck and Dawson were engaged inpoliticking

Today the FCC deregulates as fast as it can without causmg ajxoregulatorybacklash m Congress Political feasibility now appears to be the bmdmgconstraint The FCC's pnce capproposa! is the logical laststepbeforecomplete deregulauon (although the commission's preliminary noticeonly hmts that this so) (1987, p 17, see also Johnson, 1989)

Because of Congress's concem with the burgeoning federal budget, itwould seem Patnck would be on firm ground in arguing that pnce cap was lesson«ous than ROR regulation. Two f^t<xs may have offset this First, Cwigress,pubhc mtêst groups, and AT&T's competitors would be suspicious of anyrûlatoiy change supported by AT&T Secwid, the pnce cap initiative waspwceived by many as part of the "deregulatwy dnve" that resulted in the repeal ofthe Faimess Doctnne The latter mcensed key Democrats m Congress Represen-tative Maricey points out

On August 4, 1987 the FCC voted on two equally significant andcontroversial mitiauves The more immediately visible action was theFCC repeal of the Faimess Doctnne The action became a symbol of thisFCC's lnsensitivity to Congress' authonty and its relentless pursuit ofderegulation of the brojulcast mdustry

500

Symposium on V-'ildlife Conservation and Pubhc Pohcy Shields

The FCC's other action on August 4th, proposing to replace rate of returnregulation with the price tap niocie! fc" all dommani earners is equallyimportant

The peculiar tunmg of these two pronouncements created theunfortunate impression that their linkage was more than a matier ofcoincidental scheduling Rather, many m Congress, mcludmg myself,saw such timing as evidence that the price c ^ proposal was the frateinalideological twm on the common carriCT side of the telecommumcauonmdustiy, to the Faimess Doctrme repeal on the broadcastmg side of mytelecommunications jurisdiction It cannot be lost on the FCC thata Democratically controlled House and Senate will not raise theirglasses m a toast to deregulation for dereguUtion's sake (Markey, 1988,pp 196-200)

Given this state of affairs, it would have been poliUcally sound for Patnckand Dawson to advance pnce caps catitiously

A second point to emerge from reactions to the NPRM was the lack ofunanimity within the FCC C(»nmissioner Patncia Dennis (Democrat) made it clearthat the pnce cap option would need to meet "three fundamental attnbutes" beforereceiving her support (a) allow for upward and downward rate adjustment, (b)prevent the possibility of excessive earner earnings, (c) be no more costly than, andat least as efficient as, the current regulatory structure Dennis was particularlyccBicemed with the possibility that AT&T might extract mcreased returns from themonopoly portion of its activity by keeping pnces flat but degrading service quahty{Communications Daily, August 5, 1987, p 3) As will become clear, Patnck'sinability to gain consensus on pnce caps at the FCC complements the growingtension between the FCC chairman and Congress

The StakeholdersFollowing the release of the FCC's NPRM, many affected parties filed

conments with the FCC These comments can be arranged in terms of those seekingthe removal of ROR regulation and those who believed it performed adequately

Telecommunications IndustryNot sufHismgly, the NTRM was welcomed by AT&T Anticipation of the

FCC proposal increased AT&T stock pnces {Telephony, August 10,1987, p.lO)Accordmg to AT&T, however, their shareholders would not be the (sily winnersTelephone companies would make more money, regul^ors would avoid thecomplex,ame-consumingpbofregulatingutilities,and most important, ratepayerswould avoid a steady spiral of potentially larger rate increases

In November 1987, AT&T indicated the kinds of profits it expected tomake under pnce caps AT&T announced it would mcrease investment m itsnetwork by SI billion over the next two years An AT&T spokesperson argued,"with the FCC moving toward pnce caps, the lid on profitability is coming off onthe long distance side It makes more sense financially to be pumping money into

501


the long distance network now when there will be mwe profits flowing to the bottomline " Through such an operation, AT&T would lnmally keep its profits fromsoanng from {Hice caps *'An abundance of dollars might please ^lareholders, butIt can be a pohucal embarrassment" (Telephony, November 16,1987)

The local exchange earners (LECs) argued that they, alcmg with AT&T,should reap the benefits of pnce caps Like AT&T, the LECs contended pnce capswas in the public interest {Communications Daily, Octobw 22,1987, p 3) BellAtlantic Chairman Thomas Bolg^ argued, '*pnce cap regulation is the nght formof regulation at the nght time It would certainly niake no sense to withhold thisregulatory initiative ftom the bulk of the mdustry while proceeding to a[^ly itonly to the long distance earners" (re/epfc>«y, August 10,1987, p. 10) MostLECspresented the FCC with an outline of similar plans. They would first set rates tindercap with current rates, then adjust annually based on the CPI, measures ofproductivity gains, as well as external changes such as labor costs. The LECsdiffered occasionally on how to calculate productivity They agreed that allinterstate access services should be put under one cap {Communications Daily,October 22,1987, p 3)

AT&T's major compeutors in the long-distance market, MCI and U SSpnnt, gave a cooler reception to the proposal Spnnt argued thju if the FCC couldestabhsh that AT&T had lost much of its market power, and might lose more, thenpnce caps might be apiKopnate. Spnnt emphasized that pnce caps should not bea permanent alternative, but rather "an mt^im, stop-g^ measure to be ^)pheddunngthe transition to full lnterexchangecompetition " Spnntsuggestedpncecapsbe applied to domestic and international MTS, WATS, 800, and some AT&Tpnvate hne services. Not surpnsmgly, Spnnt argued that pnce floors would benecessary to prevent AT&T from pncing it out of the deregulated maricets {Com-munications Daily, October 22,1987, p. 5).

In Its pnce cd^ filing, MCI argued that "recent action by AT&T suggestsIt may not yet be prepared to conduct its maiixting and regulatory affairs in a mann^that conforms to the regulatory requir^nents apphcable to cam«^ with substantialmarket power." MCI was referring to smgle-customer tariff deals AT&T had madewith large users such as GE, Du Pont, and the Holiday CwporatiMi. These wereunder FCC mvestigation "due to substantial concons over unlawful discnmina-tion." AT&T was offenng these large users a package that was lo WCT than the pubhctanff pnce that AT&T charged other business customers for the same SCTvicesMCI's position was that with the streamlining of regulatory aj^ovals fw AT&Tservices that would occur under pnce caps, "these service offMings would not havehad the benefit of the review that the Common Carrier Bureau has det^mmed isnecessary to enforce the Communications Act properly." {Communications Daily,October22,1987,p 5, Communications Daily,Fchrmry 4,1988, p.3,Sims, 1988)

Users and ConsumersStrong cnticism of the FCC' s plan came from the Consumer Federation of

America (CFA) and the Nauonal Association of State Utility Consumer Advoc£Ues(NASUCA) Both emphasized that pnce c ^ regulation would involve a damaging

502


trade-off dommantcamerswouldbenefitattheexpenseofconsumerwelfare TheCFA argued that the FCC prqx>sed to abandon "its highly successful, tned-and-tmemethod" of regulation According to NASUCA, ROR rules had kept rates downand pnMnoted universal service NASUCA argued that efficiency gams claimed bythe FCC fw pnce caps were highly questionable It accused the FCC of notpresenting an "even-handed assessment" of the costs and benefits of pnce caps andROR The CFA believed pnce caps would eliminate adequate evaluation of earnereammgs, violatmg the "just and reasonable" requirement for rates mandated by the1934 CommunicatiCHis Act {Communications Daily, October 22, 1987, p 5)

User groups such as the Ad Hoc Telecommunications Users Committee(AHTUC), the Committee of Corporate Telecommumcations Users (CCTU), andthe International Communicauons Associauon (ICA) argued that ROR regulauonwas more effecuve than many of its detractors admitted, and should be replaced, ifat all, by the best possible pnce cap system For the CCTU, the FCC's proposal"favors unsubstantiated cost savings at the expense of service quality, facihtatesexcessive earner earnings and undermines service quahty '' These user groupsagreed that pnce caps should not be applied to the LECs unless it could bedemonstrated such a plan would allay user concerns about frequent and disrupuverate mcreases (Telephony. December 14,1987. p 12)

State RegulatorsIn the last days of the filing penod, November 16-19,1987, the National

Associauon of Regulatory Utility Commissioners (NARUC) held their annualconference FCC Chairman Patnck and the FCC Common Camer Bureau ChiefGerald Brock were in attendance NARUC's 'fight" was taken to the FCCccmtmgent by Gail Garfield Schwartz, the deputy chau^voman of the New YoricState Public Services Commission She argued that the pnce cap plan would cappnces at present levels, which might already be too high Thus, there was a premiumon the base rates being "correct" m the first place, as any iniual distomon would besubsequently magnified by applicauon of the index NARUC passed a resoluuonurging a cauuous approach to pnce caps The resoluUon asked for a three-year trialof lnterslate caps, with stnct oversight of cost allocauon rules and comparisons ofcosts under both pnce cap and ROR regulation (Telephony, November 23,1987, p12)

Congress and the FCCWhile affected parues were fibng comments at the FCC, a stream of

ccHTespondence flowed between the FCC and some key Democrauc congressionaifigures Chairman Patnck received letters from Representatives Dingeil andMarkey, and from Senator Holhngs, the Senate Commerce Committee chairmanThis conespondence set the stage for the upcoming congressionai heanng inNovember, 1987 Dingell,MarkeyandHolhngs tookpostuons closely correspond-ing to that of consumer advocate groups Their basic concem was that facihtyquality and universal service might be thre^ened by removing rate-of-retum (ROR)restncuons on AT&T and the LECs Holhngs argued that "it was far from clear that

Policy Studies Journal, 19 3^4

the pnce C£Q) a[^)roach will, m fact, produce [benefits to consumers] and may wellresult in huge profits f<x earners " He urged the FCC U) "demon^rate unequivo-cally" any ratq^ayer benefits from pnce C£^s Furthermore, Holhngs challenged theFCC to produce evidence that earners w^« inflating rate bases undo" RORregulation {Communications Daily, October 27,1987. pp. 2-3).

At the House Telecommunications Subcommittee on pnce caps and costallocation issues. Democrats consistemly probed P^nck to provide onpincalevidence for his bst of "theoretical" inadequacies of ROR regulation. Re^ffesenta-tive Leland (Democrat) asked why the FCC was "throwing the baby out wuh thebath water." Why could the FCC not refine ROR regulation? Patnck repbed thatthis was a case where "we should toss the baby out" {Communications Daily,November 12,1987. p 2)1

Several weeks after the heanng. Representatives Dingell and Markeycontinued pressunngPatnck Inatoughlywordedleaer,bothmformedPatnckthathis perfOTmance m the recent heanng did not persuade them that "such a pure profitderegulaticm ap{xx)ach [l e , pnce c^s] is consistent with the statut(»y requirementthat pnces be just and reasonable " They argued that pnce c£^s would permitearners to transform cost savings mto profits, creating "a perverse mcenuve to cutcwners at the expense of service quality, while at the same time providing noassurance that the public will benefit from real efflciency gams " Agam, theccHigressmen pushed for evidence of alleged problems with ROR reguhUKHi{CommunicationsDaily,December 10,1987,p \,Telephony,December 14,1987,

P I)In remarks to Communications Daily, dated December 10,1987, Repre-

sentative Markey indicated the strategy of attnuon that he and other membo's ofCongress would be adopting m their "battle" with Patnck. "[the] House won't sitidly by and let the FCC implement pnce cap unless it makes a clear case for changeIt IS my hope that there will be a full guarantee of due process, an exhaustiveadmmistrauve process as a prelude to any FCC acuon." He noted that legislationblocking jHice caps was possible, but he preferred compromise {CommunicationsDaily, December 10,1987, p 2)

In resp(xise to pressure by Dingell and Markey, Patnck finally [x^sentedevidence of rate base *'padding" under ROR regulation. He pomted out that in theprevious two years, the FCC had disallowed more than S163 milhon m dcnninantcamer investments and had reduced rates by approximately S900 million Famckc(mcluded, "although these figures represent a significant saving to consumers asa direct result of Commission action, there is every reason to believe that dominantcamer rates and rate bases are 'padded* to a much greater extent .(CoffiffXMmcafw/i5Z)ai/y, February 3,1988, p 3) Patnck again emfrfiasized that theFCC was not wanung to abandon regulation but rather replace one regulatorysystem with another

Respondmg to Patnck, Dingell and Markey changed their tack. Theyargued that Patnck had not proved that pnce caps wcmld be better than "other moremoderate regulatory prc^sals" (emphasis added) Dingell and Maritey noted thatthe FCC "should have conducted a responsible evaluation of promismg altematives

504


to the current regulatory system '" rhey hoped 'this poorly aruculated proposal ismerely a fu^t effrat," and they looked forward to further material the FCC wouldsupply, "well before taking fmal action" (CommumcationsDaily, February 3,1988,K). 2-3). Ongmally, Dingell and Markey had cwicenti^ted on pressmg Patnck toprovide evidence of the inadequacies of ROR regulation They were now askingPatnck to prove that price caps would perform better than ROR regul£Ui(Hi and"more moderate" proposals Clearly such a task would be extremely timeC(visummg

Days after this episode, the first of two bills designed to delay action on|Mice caps until 1989 was introduced m Congress The legislation (HR 3910) wasintroduced into the House on February 4, 1988, by Representative Jcrfin Bryant(Democrat), member of the House Telecommunications Subcommittee, afterdiscussion with Dmgell and Markey Dingell and Markey made it clear that thelegislation was m response to the "poor and unsatisfactory" answers received fromPatnck

Bryant's bill would tffder the FCC to "terminate, without further acuon,"the pnce cap proceeding and set condiuons for establishing a new proceeding Thenew proceeding could not start before Januar>' 1, 1989 The latter condition,acccHxhng to Bryant's staff, was to ensure that pnce caps did not become an election-yearissue It would also force the new administrauontomakeachoiceastowhetherto start a pnce cap proceeding again {Telephony. February 22, 1988, p 8)

Bryant's bill goes to the heart of Dingell and Markey's objections to pncec ^ s Both argued that the FCC had not proved price caps could perform better thanROR regulauon The legislation would require that new FCC rulemaking contain"explamuory notes, supporting matenals, and quantitative data that demonstrate byclear and convmcing evidence that both business and residenual telephone ratepayerswill obtam c(Hnparable or better services at lower rates than under thecurrent systemof regulation " The phrase "clear and convincing evidence" is, accordmg toBryant's staff, "the hammer " This meant the bill would not permit the FCC to rushto implementation {Communications Daily, Februar\^ 3, 1988, p 3, Telephony,Felffuary 8,1988)

Bryant's bill was accompanied m the Senate by Democratic Senator JohnKeiry's bill (S 2044), which would require the FCC to justify its proposal morefully and to address whether pnce caps would apply to AT&T and the LECs, or tothe former solely {Telephony, Februarj- 8,1988)

As congressional opposition to the proposal appeared to be heating up,AT&T released a survey on February 4, which purponed to show public support forregulauon of AT&T's fHices rather than its profits AT&T spokesman James Bymerefused to charactenze the timing of the survey's release as an attempt to stem thetide of pnce c ^ opposition in Congress (Te/e/j/iony, February 8,1988) Neverthe-less, It was clear that a strategic goal of the telephone industry would be to preventthe bill (HR 3910) from collecting many cosponsors The survey was followed byrelease of the findings of a study conducted by Bell Communications Research(Bellcore) at the request of the regional holding companies The findings were"leaked" two weeks before us official release date The study was designed to


answer assertions that consumers would do w(»^e underpnce caps than under RORregulation. Bellcore's study concluded that consumers would have been bett^ offhad pnce caps been in operation since the AT&T divestiture. Bellcore argued thatpnce caps would let LECs cut costs by elunmating some rate-making procedures,allowmg the LECs to reduce mto^tate access charges by about 4% dunng 1989*92,afteradjustmg for inflation If long-distancecam^^ passed al(xig cuts to customers,as they have in the past, consumers would see annual inflation-adjusted imce cutsof 3% {Telephony, February 8, March 21,1988)

However, according to Bryant's staff, a majtx effort was in progress toobtam cosp(Misors A letter campaign to members of C(»igress was underway andthere were iHX)misesofsupportfr(Hn the CFA, state regulators, consumer advocates,lcHig-distance companies and large busmess us^s {Commumcations Daily, Feb-ruary 12,1988, p. 3). Under this growing pressure, Patnck acquiesced; on February16, 1988, he committed the FCC lo a new pnce cap proceedings. The threat oflegislation had achieved its objective, the onginal pnce cap proceedmg had beenarrested {Commumcations Daily, February 17,1988, p 3)

Price Caps: The Second Proceeding

At Its agenda meeting on May 12, 1988, the ICC offered fw pubhccfflnment a detailed pnce c ^ plan The proposal wcnild allow AT&T and the localexchange camers (LECs) to voluntanly use pnce caps instead of ROR regulationThe camers opting for pnce caps would be required to cap rates at 3% below thecalculated mflation rate, beginmng Apnl 1,1989 The 3% adjustm^t. which wouldbe unposed annually m calculating pnce caps, reflects a projected telephoneindustry productivity increase above national productivity increases. The FCCprojected that over its fu-s t four years, the plan would produce $ I 6 billion m savingsto consumers

The plan mvolved cappmg all AT&T's existmg services except specialctMistrucuon services, customized services, and other services subject to below-the-line accounting requirements. Rates would be regulated through aggregate caps onspecified service groupmgs, called "baskets " AT&T would have two baskets, onefor private lme services and one for switched network services such as WATSSimilarly, caf)ped LEC services would be separated mto a switched access basket,including the access fees charged to long distance camers, and a basket for all otherservices, consisting of special access services {Telephony, May 30,1988, p.lO).

The plan would allow camers to raise or lower individual service pnces by5% annually without FCC review The aggregate pnce of savices would have to bewithin pnce cap guidehnes, however The guidelines would be based on an indexof changes m mflation, productivity and special costs beyond a carrier's control{Commumcations Daily, May 13,1988, pp. 1-2) On the sensiuve issue of whereto set mitial c^s , the FCC concluded that pnces in effect at the beginning of the c£^plan were the most apinopnate starting point. According to Patnck, a compr^en-sive rate investigation befwe setung the caps would not be producuve or admmjs-trauvely feasible {Telephony, May 16,1988, p 1)

506

Symposium on Wildlife Conservation and Public Pohcy Shields

The reactiCTis of affected interests were predictable The majOT telecom-munications mdustry actors perceived the proposal as being too modesL ForAT&T, the plan mvolved too much detail and it would prevent {mcmg flexiblyDis£9)pomted that the FCC used a 3% instead of 2% productivity factor, the LECsargued that the 3% figure exaggerated producuvity increases in the telec(Mnmuni-cauons mdustiy AT&T and the LECs asked the FCC to lower the productivityfactor AT&T asked that rate bands be changed to eliminate the possibility of pncefloors {Communications Daily, July 29,1988, p 1)

On the other hand, public interest groups such as the CFA and NASUCA,along with key Democrauc congressionai figures, argued that the jxoposal did notlnsiffe th^ consumers would receive better services at lower pnces, or prevent prof itwindfalls for camers Cntics noted that U K regulators had recently released arqwrt blaming pnce caps, in pan, for BT's decline in service quality {Telephony,May 16,1988)

As with the release of the first pnce cap proceeding, dissension within theFCC was evident For most of the first proceedmg, the FCC had four commission-ers, two Republicans (Patnck and Dawson), and two Democrats (Quello andDennis). However, Dawson was appointed to the Department of Transportation inDecember 1987 This left Patiick ma vulnerable position Patiick's attempt to getFCC staff member Bradley Holmes appointed as commissioner failed Congresshad strong resavations about Holmes his close ties with Patiick and also his rolein the repeal of the Faimess Doctnne {Commumcations Daily, May 16,1988) Asthe second proceeding continued, Queilo and Dennis, particularly the latter, becameincreasingly cntical of Patnck's proposal

Indeed on July U, 1988, Dennis released a statement voicing concernspreviously exfffessed by key Democrats in Congress, and by consumer and userlnt^^st grou{» Dennis was particularly concerned about the threat to servicequality that could exist with pnce c ^ s "unless the Commission takes care, this[l»ice cap] could be a formula for expensive creeping dilapidation of the telephonenetwork " Furthermore, she questioned whether pnce c ^ was consistent with theFCC's mandate that rates be just and reasonable Dennis concluded that if herctHicems were met, "I would look forward to implementing pnce c ^ s{ConunumcationsDaily,iu\y 12, i9SS,p I)

Planned or not, Dennis' statement was released just before two congres-sional heanngs (July 12 and 27) The main issue underlying the heanngs was oneof time Dmgell, Markey, and other Democrats argued that the many holes in thepnce cap plan resulted from Patnck's attempt to rush pnce caps through Markeyasked, "What is the rush, Mr Chairman'' Is there a national emergency in ourtelecommunicauons industry which demands that we move now'' I am not aware ofone " He added," The new plan cannot be answered in the very few short monthsleft in this Admmistration [I]t would be unfair and unwise to adopt the plan andleave thedifBculties and consequences for the new FCC next year" {Telephony, July18,1988, p 10)

It was apparent that many Democrats were concemed that Patnck mightattempt to "squeeze in" a pnce cap order in the last days of the administration, after

507


Ctmgress had gone home for the year. Respondmg to Bryant's mqtury as to whetherthe FCC would issue such an order, Patnck rq)lied, "I can * t promise that we wouldnoL" He said the FCC could make such a decision before the end of the year if therecOTd mdicated the pubbc interest would be served {Commwuceuions Daily, July14,1988, p 1) In respcxise, a Senate heanng was scheduled for late August withthe intent of lookmg at the previously mentioned bill (S .2044) proposed by SenatorKeiry to block implementation of pnce c ^ s before January 1989 {CommumcationsD<3w/>, July 28,1988, p 1)

The strategy of the congressionai Democrms wwked; Patnck did not pushpnce caps through by the end of 1988 Given the hostility toward Patnck amongDemocrats m Congress, K^ry's bill would have had little trouble m findingcosponsors. Furthermore, it was not clear that the commission would have votedin favor of implementation. The chmate withm the FCC suggests Quello andDennis would not simply defer to Patnck's wishes Both stated pubhcly theirproblems with the proposal Also at this time, Patiick was unable to command asecondvoteonmanyissues Forexample.mJuly 1988,theissueofstrategicpncingfor the LECs was removed from an FCC agenda meeting because Pauick could notsecure support from Dennis oTQ\ie'Wo{CommiuucationsDaily, August 15,1988, p1)

Horse Trading

On assummg office in the early days of 1989, a major concem for the newBush adminisu^ti(xi was to build a good woriung relationship with the D^nocrati-cally controlled Congress. Given his stormy relationship with Congress, Patnck'sfuture at the FCC was highly uncertam To enact pnce caps before his possibledq)arture, Patnck changed his tactics vis-a-vis Congress

In a letter to Congress on January 19, 1989, Patnck said he wouldrecommend the plan be modiHed to include a third basket, a separate jisice cap iocAT&T's residenual service This modification would make cross-subsidizati(Hibetween residential services and other services mort difficult, and can be inter-preted as a concession to advocates of consumer interests, Patnck also suggestedan "automatic stabilize" mechanism for LEC pnce c^ s . The stabilizer concept issimilar to the New Yoric Pubhc Sw^ices Commission's excess revenue-shanngproposal enacted for New York Telephone (telco) The "telco's" ROR on equitywas set at 12.5%. Should the telcoexceeda 14% ROR.itmustretiim half its excesseammgs to ratepayers. In his letter, Patnck noted that Dingell had expressed mtra^stin such a scheme In addition, m response to Democrauc Representative JimCo(^ r ' s concem that pnce caps for LECs could unfairly hurt small "telcos,"Patiick said that he would modify his proposals to allow actequate opportiinities fotsmall camws to elect pnce c ^ {Commumcations Daily, January 24,1989, pp. 2-3) With these modifications, Patnck proposed to act on the pice cap proceedingat the FCC's agenda meeting on January 30

While welcoming Patnck's conciliatwy efforts. Congressmen Inouye,Dmgell. Maiicey, and Holhngs argued that further comment on the final fwm of the

508


pnce cap proposal would be appropnate before the FCC acted Swiate CommerceCommittee Chairman Hollmgs ccwnmitted the Commumcations Subcommittee toheanngs on jmce c^re in late Feb^ary, whatever \he outcome al the FCC Leadingc(MigressionaI Democrats threatened to hold up legislation to ease the ModifiedFinal Judgement constraints of the Regional Bell Holdmg Companies m order torepeal pnce caps {Comtmimcations Daily, January 24,1989, p I)

Conunumg his attempt to shwe up relaucms with Congress, and withCommissions^ Denms and Quello, Patnck delayed acti(»i on pnce caps untilMarch 16. According to Patnck, he was projecting "the spint of a new Adminis-trauon "HisacUonwasthatof"akinderandgentlerchainnan " Dingell said Pauickhad "acted wisely " Markey accepted the move as a "consmicuve step."^ Quellobelieved Patnck was "extending the olive branch—if you [Congress] want moretune, we'll give it to you " Dennis agreed, "[Patnck's action] was a goodacccHTimodation of congressional and FCC concerns" {Commumcations Daily,January 31,1989, p 3)

In i^epanng for heanngs on price caps on March 1, the FCC andccxigressional subcommittees reached an unusual disclosure agreement The FCCagreed to disclose the pnce cap plan to Congress and the public in advance of theusual i»ocedure of publishing the order Patnck lnframed Congress of manyspecifics of the plan the methodology of calculating the producuvity factor, aspecific descnption of the services to be contained m each basket, the proceduresby which rates would be allowed to rise or fall within the proposed bands, thepotential benefits for different types of users, the startmg rate iHi posed for eachelement or service, and protections fw small rural telcos {Commumcations Daily,February 6,1989, p 7, February 21,1989, pp 1-2) Patnck agreed to move backthe date for implementing pnce caps from Apnl 1 toJuly 1,1989 He accepted that"additional ume for public debate'" was necessary (Commumcations Daily, Febru-ary 22,1989, p 2)

At the congressional subcommittee heanngs, Patnck argued that theseparaticm of AT&T services into ihree baskets would help protect consumersresidential and small business services would be m one basket subject to its ownrates and caps, 800 service would be in a second basket, the remaining competitivebusmess services would be m a third basket He noted that rates might nse withina basket, but only in aggregme and only within FCC-defined limits Furthermwe,additional consuaints would be mandated for the residenual service basket As afurther concession to advocates of consumer interests, there would be a 2% annualceiling on composite charges in pnces within the residential basket, m addition toa 5% overall c ^ on rate mcreases annually and a 3% de-acceleratOT for the pnce capgenerally Patnck also expressed his commitment to conunued geographic toll rateaveraging in order to protect consumers m rural areas {Commumcations Daily,March 1,1989, p 2)

Congressionai response to Patnck's remarks was mixed, some membersof the subcommittees exjKessed reservations about the impact of the plan onconsumers, parucularly in rural areas Dissatisfied with Patnck's endorsement oftoll rate averaging. Representative Cooper demanded the plan include language


expressly protecting toll rate averaging, cost poohng, and universal service. "I amnot prepared to take the word of a single bureaucrat who may not even be there[FCC]intwomonthstime"(C<?mm«nicafio/ijZ>ai/y,March3,1989,p 4). Cooperposted his intent to mtroduce legislation that would supulate these rural safeguardsConcerns were also raised about the absence of a pncing floor for AT&TRepresentative Dmgell, along with many oth^ members. £^lauded Patnck's newwillmgness to accommodfUe congressionai concems Members of both committeesdemanded that the FCC negotiate the luigenng rural and cwsumer ccmc^ns withCongress before the fcxmer's agenda meeting on March 16 {CommumcationsDaily, March 1,1989, p. 1; March 2,1989, p 1)

On March 16,1989, the FCC approved Patnck's plan to enact pnce capsfor AT&T beginnmg July 1.1989 and for the LECs starungJuly 1.1990. The fmalpnce c ^ plan for AT&T included elements added a few days earlier in response tocongressionai pressure Each of the three baskets would be governed by a pnce capformula that allowed for changes in mflation mmus 3 %. AT&T could increase eachservice or element by a maximum of 5%, except for the consumer-sensitive night/weekend element, which could be increased by only 4%. Patnck introduced a pncefloor: all elements ctnild be reduced by 5% As additional consumer protection,AT&T would have to calculate the average rate fOT residential savices (daytimelcmg distance, evening long distance, weekend and night long distance, mt^na-uonal. Reach Out Amenca, and miscellaneous services such as curator assistance)and make certain that the average, based on the weighted average of use for each ofthe services in the basket, would not mcrease more than 1% annually (Burgess,1989). Other changes in response to congressionai pressure mcluded fiuiher nouceon pnce caps for LECs {Commumcations Daily, March 17,1989, p 2)

Discussion

Dennis Patnck chose pnce c ^ s as the centopiece of his tenure as FCCchairperson. Patnck's endeavor was hamstrung by his rel^onship with C(Higress.TTie "bad blood" between f^tnck and Congress can be traced to the eventssurrounding the elimination of the Faimess Doctnne Astonishmgly, Padickproposed price c&ps oa the same day the Faimess Doctnne was repealed. Thisguaranteed Patnck's miuauve would face congressionai hosutity. His attempt torush pnce caps through before the end of 1988 made matters worse. The jffoblemof a bellicose Congress was exacerbated by the lack of sqiport within the FCC.Statements by Dennis m parucular gave pnce cap op^nents further ammumtion mtheir battle agamst Patnck. The result was that the pnce cap plan was ahnostshelved. Its enactment was, in large measure, due to a dramatic change in I^tnck'stactics in the early days of 1989. His readiness to make strategic c(Micessions toCongress fostered a climate of FCC-Congress cooperation that smoothed the wayfor enactment

Shooshan and Krasnow (1987) lament the supposed subservience of theFCC vis-a-vis Congress The case study suggests this is not the case Despiteenragmg key elements of Congress, Patnck (with help from the telecwnmunica-

510


tions industry) managed to enact pnce caps One must remember that the FaimessDoctnne was repealed by the FCC despite considerable hosuiity from the Demo-craDcally controlled House and Senate Congress has oversight tools that can beused to exert power over the FCC the use of heanngs and the threat of statutorymaratona to block or reverse FCC decisions This is a negative or constraining typeof power In the pnce cap case, these oversight tools were used as a means ofslowing down the FCC decisionmaking process Congress leveraged this power toair the pros and cons of pnce caps and to bargain over the form of the FCC plan 3

Shooshan and Krasnow (1987) would extncate the FCC from the currentsystem of checks and balances This would shift the balance of power towards thetechnocrats at the FCC That would be a grave mistake In the case of pnce caps,the initial proposal fell far short of being adequate The bulk of Patnck's case wasbuilt on theory rather than fact Congress used its oversight tools to demand moreacc(Mintabilily The inclusion of a thyd basket for residenual services m the finalproposal was in response to congressionai concems

Since the early 1980s, the FCC has become an advocate for U S industryinterests m the information-communicauon sector The FCC's desire to enhancethe competitiveness of majw telecommunications industry players is clashmg withtraditional concems such as universal and affordable service According toShooshan and Krasnow, since 1981 Congress has increasingly rescHted to using itsoversight tools. This is not a coincidence A, ware of the FCC pohcy shift, elementswithin Congress have sought to become caretakers of traditional regulatory con-cems Pressure on the FCC to facilitate the competitiveness of the te!ec(Mnmuni-cations mdustry are unlikely to abate, given the increasing centrality of telecommu-nicatiCHis in the globalization of producuon and markets We should thereforewelc(wne congressionai oversight

This case study suggests that congressionai committees exercise consid-erable power over the FCC This observ ation runs counter to the claims of extremevCTSions of the "bureaucratic poliucs" perspecuve (e g , Lmdblom, 1980, p 68)However, it cannot be said that the case study supports the "pnncipal-agent"perspective The FCC did not simply administer in accordance with policy direc-tives from the legislative branch but lniuated and substanually sh£ )ed policy Thus,factors other than legislauve politics were as crucial to the policy outcome Fa;torsinternal to the regul^ory agency were particularly important More speciHcally, thecase study illustrates the importance of leadership and the substantial control of thepohcy agenda theagency can attam if Its strategic advantages(e g , information andexpemse) are employed in pohucally skillful ways (see also Chubb, 1983, Robyn,1987).

This case study also highlights the importance of ideology, ancHher factorseemingly outside the purview of most pnncipal-agent models Wilson (1980)discusses the importance of the attitudes of regulators, which display both political(e g , ambitions) and ideological (e g , promarket, fffobusiness) facets (see alsoBarkovich, 1989, Breyer, 1982, Miles & Bhamlwi, 1983) A strong case can bemade that political and ideological concems of the commissioners played animportant role in the emergence and passage of the pnce cap initiative Such


concans seemed to be central to the nft within the FCC, for example.of attitudes and bebefs must go beyond those of the regulators As the remarks ofMarkey suggest (Markey, 1988,pp ll-12),ideologicaldiffttenceswereverymuchon the mind of Congress members.*

*The comments of Rohan Samarajiva and three anonymous referees are gratefully ac-knowledged

Notes

'The proposal was defeatedÂt the heanng, tesuinony was heard fnnn advocates from industry, user, and consumer

interests Hus testimony essenually mirrored their respecuve comments to the FCCÂt this tune, Dmgell was heing pressured by the Conunumcaucns Woikers of Amenca

(CWA) to take conaliatoiy steps toward Pamck(Comm«mc<i(ioniZ>fl(iy, January 31,1989, pp ?-3)Ôf course, on many occasions Congress may be divided on issues thus dilutmg the power

of Its oversight tools

References

Amall, G C,&Mead,L.M (t984) Decuioi making at the FCC InL Lewin (Ed.), 7Wecommuni-cations An interdisciplinary te3U,{pp 37-tO4) Dedham, MA Artech

Baikovidi,B R (1989) Regutatoryinterveiaiontsm in the utittty industry NewYoric QuorumBot^sBhatUcharyya,S K ,& Laughhunn, D J (1987,Febniaiy IS) Pnce cap regulauon Canweleamfrom

the Bntish Tdecom expenence'' PMic Utdates Fortnightly, pp 22-29Breyer, S (1982) Regtdation and ils reform Harvard Harvard Umversi^ PressBui;gess, J (1989, March 16) Long-distance pnce c ^ s set for approval Washington Post, p C t lCalven,R L.,Moran,M. J ,& Weingast,B R. (1988) Congressionai influence overpolicymaking

ThecaseoftheFTC In M. McCubhms & T SuUivan (Eds), Co«jr«M Structure and policy(pp 493-522) Cambndge Cambndge Umversity Press

Chubb,J E (1983) Interest grot^ and the bureaucracy The politics of energy Stanford StanfwdUniversity Press

Communications Daily Vanms issues as ated in texL Washington, OC Warren PuUishingDerthick, M ,&. Quirit, P J (1985) The polatcs cf regulation Washmgton, DC TheBrookings

Eisner, M A & Meier, K J (1990) Presidenual control venus buieaucâuc power Explaining theReagan revolution in antitrusL ^nerican Journal ofPoltiicat Science. 34(X), 269-287

Federal Commumcaticns Commission (FCC) (1987, August 21) Notice of proposed rule making improposal to replace rate-of-retwn regulation for dommani camers with price cap regulationfor interstate services Washu^ton, DC Author

Fiorina, M P (1977) Congress Keystone cf the Washington establishment Xew Haven YaleUmversity Press

Gormley, W T (1983) The polaics of public utility regulation Pittsburgh, PA University ofPittsburgh Press

Horwitz, R B (1989) Th£ irony of regulatory reform The deregidatton of American telecommuni-cation New York Oxford Umversity Press

Johnson, L.L. (1989, January) Pnce caps in telecommunications regulatory reform ARandNc4e(^M\dCorporaucn), pp 1-38

Jones, D N (1987) A perspective on sociai contract and telecommunications regulation (RepcMtprepared for the N'aDonal Regulatory Research Institute) Columbus, OH NaUonalRegulatory Institute

Jones, D N (1989, July 20) Takmg advantage of a regulatory window Public Utilities Fortnightly,pp 21-25

512

Symposium on Wu'dhfc Conservation and Public Policy Shields

Katjmann, R (1980) Regulatory bureaucracy Cambndge, MA. MTT PressKrasnow.G ,Longley,L D ,&Terr\. i | * •iQSZ', The poUnrsofbroadca't regulauon NewYoik

St. Martm's PressLe Due, D R (1987) Beyond broadcasting Patterns in policy and law New Yori LongmanLindblom,C E (1980) The policy making process {laA ^) Englewood Chffs, \ J PrenUce-HallLittlechild, S C (1983) Regulation of Bruish Telecommunications profitability (Report to \hz

Secr^aty of State) London Department of IndustryMaricey,E (1988) Comments hi K M S&pcAsky (Ed). Proceedings cf the Massachusetts Institute

ofTechnology Symposium on World Telecommunications Policy Cam^dge MIT PressMayhew, D R (1974) Congress The electoral connection New Haven Yale Umversitj PressMtCubbms,M D (1985) Thelegislativedesignofregulaiorvstruciure American Journal of Political

Science, 29i4),72\-74SMcCubbins,M D ,&Schwartz,l (1984) Congressional oversight overlooked Pohcepatrols versus

fire alarms American Journal of Political Science, 28{\). 165-179McC!ubbms,M D,Noll,R G,&Wemgast,B R (1987") Admmistrativeproce^resasmstmments

of political control Journal of Law. Economics, and Organization, 3. 24'i-2nMeier, K J (1985) Regulation Politico, bureaucracy, and economics NewYorit St Martm'sPressMelody, W H (1987) Efficiency and social pohcy m 'eUcommunication Lessons from the US

experience Unpubbshed pape'Mosco, V (1988) Toward a theory of ihe stdte and leiecommunications ptdicy Journal of

Communication, 38i\\ 10^-125Miles, R H,&Bhambn, A (1983) The regulatory executives Beverly Hills SageNati(MialTelec«nmumcauonsandIiiformaiionAdmimstration(NTIA),U S Department of Commerce

(1987) NTIA regulatory alternatives report Washmgton, DC AuthorNiskanen, W (1975) Bureaucrats and poLucians Journal of Law and Economics, 18,617-644Noll,R G (1987) Thetwisiedpair Regulation and compeution m telecommunicauons Regulation,

3(4), 15-22.Patnck, D R (1987, March 5) Long distance camer service Other modes of regulatitxi Public

UtilUies Fortnightly, f 11-15Robyn,D (1987) Braking the special interests 1 rucking dereguiattonandthe politics of policy reform

Chu»go Umversity of Chicago PressRourke, F E (1984) Bureaucracy, politics, and piAltc policy i^rdcA) Boston Little, BrownS^hers, F (1987, August 17) Why the FCC wants lo cap rates mstead of profits BusinessWeekShooshan, H M ,& Krasnow, E G (1987) Congress and the Federal Commumcations Commission

The continuing contest for power Comm/ent, 9(4), 619-633Sims,C (1988, August 18) FCC nibng awaited on \T&T discount [dan NewYorkTimes.p D3Telephony Vanous issues as ated m text Overland Park, KS Intertec PuMishmgTrebmg.H M (1988) Altemauves to tradiUtmal regulation Options for reform In H M Trebmg

(Ed ), Proceedings of the InstUute of Public Utilities Nineteenth Annual Co/Terence EastLansmg, MI Midiigan State Umversity Press

Weingast,B R (1984) Thecongressional-bureaucraticsvitem Apnncipal agent perspective PublicChoice,44. 147-191

Wilson, J Q (1980) The politics of regulation New York Basic Books

the politics of the telecommunications policy process : the example of the fcc's price cap...

Documents