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II. The U.S. Model

The U.S. system of regulating telecommunications is unique. Several agencies of the federal government, in addition to regulatory agencies of the fifty states, have important roles to play in the determination of regulatory policy. What follows is an overview of the U.S. system.


The American model for regulating telecommunications is derived from the powers vested in the federal and state governments by the U.S. Constitution. As a means of regulating interstate and foreign commerce in wire and radio communication, the United States Congress passed the Communications Act of 1934 (Communications Act), and created the Federal Communications Commission (FCC).

As an independent regulatory body responsible for regulating interstate and foreign commerce, the FCC has exclusive regulatory power over matters involving use of the radio frequency spectrum. Spectrum is considered to be inherently interstate because radio transmissions are not limited by state boundaries, and it is this interstate character that gives rise to the exclusive jurisdiction of the FCC, as a federal agency, to regulate non- governmental, commercial spectrum. Wire communication, in contrast, has been deemed to be both intrastate and interstate. As such, regulation over wire communications is shared between the FCC, at the federal level, and the various state regulatory agencies.

Pursuant to the Communications Act, the FCC's regulatory responsibilities must be implemented in a way that promotes the public interest. Given this broad mandate, and in order to promote the public interest in telecommunications, the FCC has authority to adopt rules and regulations, to adjudicate disputes, to grant and revoke licenses, and to impose penalties and fines for violations of law.

While the FCC has broad authority to act on telecommunications matters, that authority is not without substantial checks and balances. The President of the United States nominates all five FCC Commissioners for staggered five-year terms, and these nominations are subject to confirmation by the U.S. Senate. No more than three Commissioners can be of the same political party.

The President designates one of the Commissioners to serve as Chairman. The Chairman presides over all Commission meetings. The Chairman coordinates and organizes the work of the Commission and represents the agency in legislative matters and in relations with other government departments and agencies.

The Commissioners hold regular public meetings to decide policies and rules. They also may vote on issues between meetings by "circulation," a procedure whereby a document is submitted simultaneously to each Commissioner for official action.

The Commission is committed to the use of emerging technologies to serve its customers - - the American public and regulated industries -- more efficiently.

Extensive information is available about the Commission through the FCC's "homepage" The Commission uses a fax-on-demand system to allow quick access to forms, press releases and other information (202/418-4830).

The FCC is also subject to congressional oversight of its activities. Congress also decides the size of the agency's annual budget and can restrict the FCC's use of appropriated funds to certain purposes. Federal courts, as part of the judicial branch of government, have jurisdiction over appeals from FCC decisions filed by aggrieved parties. Courts also have jurisdiction to review and overturn congressional actions that are inconsistent with the U.S. Constitution.


The U.S. Department of Commerce also has an important function in telecommunications regulation. Primarily through the National Telecommunications and Information Administration (NTIA), the Department of Commerce serves as the President's expert advisor on telecommunications matters and policy. NTIA is charged with reviewing policy options on behalf of the Executive Branch and communicating proposed policy decisions to the Congress. NTIA also manages and administers the portion of the radio frequency spectrum that has been set aside for exclusive use by the United States Government.


The U.S. State Department is the Executive Branch's primary representative on foreign policy matters. Through its Economics Bureau Office of International Communications and Information Policy, the State Department represents the United States in international telecommunications forums, including bilateral and multilateral negotiations, and before international organizations. Through the U.S. Agency for International Development (USAID), the United States provides economic development assistance to foreign countries, including assistance intended for telecommunications reform and projects.


The Office of the U.S. Trade Representative (USTR) represents the United States in trade negotiations, coordinates trade policy and administers foreign bilateral and multilateral trade agreements. As telecommunications services and equipment have increased as a percentage of U.S. foreign trade, so has the role of USTR in international telecommunications trade decisions and disputes.


State governments play an important role in the telecommunications regulatory scheme of the United States, primarily with respect to basic local telephone service. Each of the 50 states, as well as the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands, has a state regulatory agency with jurisdiction and responsibility over intrastate communications. These Public Service Commissions or Public Utility Commissions, as they are frequently termed, typically exercise regulatory power over several regulated utilities in addition to telecommunications, including electricity, water and power, and in some instances, transportation. An evolving marketplace and new deregulatory environment are changing the function and nature of state regulatory agencies, however. In light of competition, state public service commissions are shifting their focus from regulating monopolies to promoting efficiency and expanded services.

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