From International Competitive Carrier to the WTO: A Survey of the FCC’s International Telecommunications Policy Initiatives 1985-1998

With the creation and implementation of the February 1996 World Trade Organization Agreement on Basic Telecommunications Services, the international telecommunications community has (at least on paper) promised ostensibly to move away from markets characterized by monopolies and toward a world of competition and deregulation. The big question, however, is whether these efforts will actually lead to better economic performance in the market for international telecommunications products and services. This Article examines one particular, yet extremely significant, portion of this inquiry—how much have U.S. international telecommunications policies specifically helped or hindered this process. This Article, after surveying Federal Communications Commission (FCC or Commission) precedent from the FCC’s first major international policy decision (International Competitive Carrier) through the FCC’s implementation of the WTO Agreement (January 1, 1998), concludes that despite a few laudable achievements, the FCC’s efforts have been marred by both the demonstrable rise of neo-mercantilism at the expense of consumer welfare, as well as substantial legal and economic analytical inconsistencies and outright errors resulting from their embarrassing attempts to implement and defend this neo-mercantilist policy. By adopting such legally and economically flawed policies, the United States has achieved neither trade policy’s basic goals of promoting U.S. investment abroad nor the maximization of consumer welfare under the FCC’s public interest mandate. Tragically, the only tangible achievement apparently has been the delay of effective WTO implementation and the rise of international ill-will against the United States and, a fortiori, U.S. firms