Chicago is a city that, throughout its history, has not passively taken the world and received wisdom as given. Instead, it has challenged the world and sought a better world. And it has challenged and received wisdom in search of better wisdom.

Let me give just a few examples. Chicago was founded near a portion of Lake Michigan with unnavigable sand bars and a salted Chicago River. Received wisdom had it that water navigation was not an option.

The land around what was to be Chicago was little more than mud flats, unpleasant when dry and much worse when wet. Received wisdom was that this was not an auspicious site for a town, much less a great city.

Chicago filled in land and built buildings on stilts. Chicago burned down more than once. Received wisdom would be that this is not a promising start. Chicago rebuilt, time and again, and innovated with fire walls.

The land around Chicago is flat as far as the eye can see, and further. Land was cheap. Received wisdom was that growth in this unlikely city would be a horizontal sprawl. But instead, Chicago went vertical. Chicago -- not older cities, or more crowded cities -- was the birthplace of the skyscraper.

Like Chicago, America herself has innovated -- with new ideas, new products, new services, new ways of doing things.

For new ideas, particularly in manufacturing, food processing, transportation, and architecture, Chicago has often led the way. Because Chicago has not necessarily accepted received wisdom.

Chicago has a fine history in intellectual thought as well. In the 1940 to1970s, when much of academic economics proclaimed the supremacy of the State, the omniscience of state bureaucratic and politicians, and the wonders of centralized planning to correct the imperfections of the market. The University of Chicago, along with a handful of others, would not go along. It would not accept the new received wisdom. Its faith was in markets; its skepticism was of government itself.

And, dare I mention them, the Chicago Cubs. Most cities love teams that win, they are hostile to consistent failure. Received wisdom would be that Chicago and the Cubs would not be a good combination. But, you see, Chicago is not a city in which to apply received wisdom.

And today, I wold like to ask a simple question to test the received wisdom. And I can think of no better city in which to test received wisdom than Chicago.

My question is simple: Why should governments have special laws and regulations for telecommunications?

I do not want to ask this question in terms of the United States. As a Commissioner at FCC, my job is to follow the law, not to try to influence it or change it. Being an FCC Commissioner means a duty to accept received wisdom, not to innovate. The FCC follows the law and Congressional policy; we do not make it.

But sometimes I am asked to consider the plight of other countries and other Commissions. If they have the opportunity to start anew, why should they regulate telecommunications? And if so, how?

If one were going on the basis of received wisdom, other countries should regulate telecommunications heavily because that is what the great countries of the world do, and surely they must know what they are doing.

And after all, they are prosperous with the regulation, aren't they?

But these great countries do not have intricate special laws for all sorts of industries, such as wholesale and retail trade or manufacturing. What makes telecommunications different from, say, the manufacture of breakfast cereal, or its wholesale distribution, or its retail trade?

I think that if we understand the answer to this question, we can better advise those nations that have the luxury of making their communications laws from scratch. And perhaps we can even better understand our own laws.

But we must not simply begin with received wisdom.

Let me distinguish, if I may, between reasons that a government should have laws and regulations, on the one hand, and the structure of government institutions to administer those laws, on the other. I will address organization later.

Let me note that I begin with the assumption that markets are fairly efficient. It would be all too easy and tempting to take a purely libertarian perspective and suggest that the government should do nothing. I may disappoint you.

I can think of at least five reasons that a government might have laws that treat some goods and services, including telecommunications, differently from other goods and services.

1. Intellectual Property.

Communications involves many complex forms of intellectual property. Some very sophisticated equipment and computer software, some network equipment that at various times may have common carriage usage, and program content that may be distributed in peculiar ways. For these and other reasons, communications may present some issues in intellectual property that may require specialized intellectual property laws and specialized exceptions to intellectual property laws.

Consider in the United States the current controversies surrounding the Satellite Home Viewers Act and the distribution of broadcast network programming.

Or consider the intellectual property disputes surrounding as familiar a subject as the White Pages, Yellow Pages, and customer proprietary network information. Intellectual property may apply in different ways to communications, as opposed to breakfast cereals, but only slightly differently.

I do not however necessarily know that a government requires a specialized communications agency to handle intellectual property in order to manage specialized intellectual property issues related to telecommunications.

2. Common Carriage.

When a hotel, or restaurant, or airline, or taxicab, or retail outlet, or auto rental company, offer a service to the public, they must take all comers and may not discriminate reasonably among them. The legal concepts of common carriage are quite old and do not have a one-sided regulatory basis. Of the hundreds of industries in the U.S. that have these characteristics, few have specialized federal agencies to regulate common carriage and public access and convenience. For the U.S., communications is one such industry.

Much of what passes as U.S. communications law falls under the heading of common carriage. I am not offering an opinion as to whether these laws are necessarily good or bad, but it is quite clear that the common carrier obligations on telecommunications carriers are substantially different from those of other businesses. To the extent government wants to treat these carriers differently, specialized laws and regulations are required..

3. Public Property.

In all countries, not all property and rights are in private hands. Rather, governments control much property and rights. Some of this property, such as spectrum, satellite slots, rights of way on public lands, are peculiarly valuable to communications services. Developing contracts for access to this public property is often peculiar to communications.

4. International Coordination.

Communications do not end at national boundaries. To the extent that there are peculiar rights and contracts that must be negotiated with and through foreign governments, a governmental role may be necessary. Satellite coordination, interconnection of international networks, international payments and contracts, and international intellectual property are but few examples of areas that may be peculiar to communications and that do not involve many goods and services, such as breakfast cereals.

5. Administrative Simplicity.

I have mentioned four reasons why a government might reasonably establish separate laws or regulations governing telecommunications: (1) intellectual property; (2) common carriage; (3) public property; and (4) international coordination. In each instance, imagine that there were no special laws or rules for telecommunications activities. Could existing laws and common law practice accommodate the peculiarities of telecommunications?

I think the answer is unambiguously "yes." However, the peculiarities of telecommunications might lead to many disputes and unresolved issues. Resolving these disputes might overwhelm court systems, and in the interim, uncertainty would have a harmful effect on markets. For sheer administrative simplicity, rules specific to telecommunications may help.

Let me hasten to note that telecommunications rules do not require grand bureaucracies, whether new or existing. Consider, for example, that in the U.S. both Federal and State governments have imposed many restrictions and classifications on real estate. These new rules have been superimposed on existing common law mechanisms of property and contracts without bureaucratic micromanagement. There is no peculiar reason that telecommunications law could not also rely on traditional common law mechanisms.

6. Technological Change.

Let me compound the problem. All five of these reasons can exist in a world without technological change. Imagine a world without technological change.

It might be a good world. It might be a Garden of Eden where everything that one desires is readily available. There is no reason to innovate when you have everything you could possibly want both today and tomorrow. In a world of satisfaction, there is no need to innovate.

But a world without innovation might also be far different from paradise. It might be quite the opposite. It might be perfectly horrible. It might be a Gulag in Siberia where life is painful and miserable today -- and certain to be worse tomorrow. Why invest and innovate when there is no hope for tomorrow?

There are two necessary ingredients for innovation: hunger and hope. If innovation is to happen, things cannot be perfect. There must be room for improvement. And there must be some hope that investments in innovation today will survive until tomorrow.

For centuries, that hope for the future has emerged from what may be called common law mechanisms, particularly property and contract rights. One of the most valuable roles of government is to enforce those basic rights.

Telecommunications is a unique sector precisely because of technological change. It did not exist at all a century and half ago. It did not exist as we know it today just yesterday. And tomorrow it will have changed again. Consumers around the world are made better off by new innovations in telecommunications. Delays have incalculable harm.

Rapid technological progress compounds the importance of getting intellectual property rights, common carriage, public property rights, and international coordination just right. Getting them wrong means delay and uncertainty and, ultimately, less innovation altogether.

Much has been written about the origins of the American Communications Act of 1934. It is difficult to understand how, back then, radio and simple telephone service were whiz-bang technologies. It was precisely because of technological change that the U.S. began regulating communications.

I have not mentioned many of the usual reasons given for special government laws for telecommunications. Frankly, I don't think some of them, such as content regulation and price regulation, make a lot of sense in terms of legitimate government interests. In other cases, there may be a legitimate government interest. But that interest extends for beyond telecommunications and there is nothing peculiar about telecommunications within the broader government interest. These areas include social policy, income redistribution, education, labor, campaign finance, antitrust law, consumer information, and consumer protection. For these, there may not need to be specific communications law. If one applies the test of what happens if there are no laws in these areas peculiar to telecommunications, the government would simply address them elsewhere, under the rubric of the general subject matter that is being pursued.

Finally, I would like to offer a few thoughts on the organization of telecommunications rules. To the extent they can be layered on top of existing common law mechanisms, no government bureaucracy is needed. And to the extent government agencies are needed, I believe they should be divided by function.

First, consider rulemaking, enforcement of rules, and dispute resolution. One of the great principles of 18th century political philosophy was the separation of powers. Not just because of some sense of division and balancing of powers, as if there were some welfare enhancement by merely dividing and balancing powers. If so, welfare would be maximized by dividing power into infinitely many groups.

Rather, the division was intended to get to some fairness and balance in outcome.

When those who write rules also have the responsibility to enforce them, there is little incentive to write precise, unambiguous rules. Rules may be ambiguous to the public, but not to enforcers. The enforcers -- but not the regulated public -- also have the luxury of changing rules as they go along.

When rulemakers, enforcers, and judges are one and the same, the public has nowhere to turn for relief. No judge is likely to admit that a rule he wrote was wrong, unlawful, or unjust. No judge is likely to admit that an enforcement action he undertook was wrong, unlawful, or unjust.

Combinations of power have rather unfortunate consequences. They lead to confusion of process. What might begin as a simple dispute resolution becomes a trading off of a dispute resolution for a rulemaking here and an enforcement action there.

Lord Acton once said "Power corrupts; and absolute power corrupts completely." When speaking of "absolute power," he might have been speaking not just of the degree of power, but of the extent, scope, and lack of limitation on power.

You have heard my rambling about a world of hypothetical countries that do not even have telecommunications law. Such countries, of course, do not exist.

I have probably spoken far too long now. Enough of received wisdom. You don't need it in Chicago. You certainly don't need to listen to someone from Washington, D.C. come discuss how to think outside of the box. If ever there were an oxymoron, that may be it.