Many of the legislative initiatives in the Telecom...
Many of the legislative initiatives in the Telecom Act of 1996 fell flat because lawmakers failed to understand “reasonable expectations of market structure, the effect of the legislation on stakeholder incentives,” and “the potential for technological change,” said Phoenix Center…
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President Larry Spiwak in a blog post Thursday (http://bit.ly/1dSIgQ5). The experiment of unbundling -- the “signature legislative initiative” in the act -- was “effectively over” when the FCC in 2005 issued its Triennial Review Order that “rendered most business plans based on unbundled network elements financially unviable,” Spiwak said. Congress’s attempt to create a retail market for set-top boxes similarly failed because such a market is inefficient, “and markets abhor inefficiency,” Spiwak said. Before passing legislation, Congress must understand the “underlying economics of the problem,” and have “reasonable and realistic expectations of market structure,” he said. Successful legislation must also “make sure that the incentives of all the stakeholders are aligned,” lest “sabotage against the paradigm” run rampant, he said.