This paper provides a brief historical sketch of cable and telephone regulation in the USA, the purpose of which is to demonstrate the legacy that precedes contemporary debates over competing models of digital networks, and to question the justifications offered for regulating such networks as private property with no corresponding public service obligations.
The paper relies on historical research to examine the rationales that have been used for cable and telephone regulation, based on the use of legal documents (statutes, regulations, court rulings).
The historic justifications that have been used to protect telecommunications from competition amounts to what is known as “corporate welfare”. Today's cable and telephone networks, and the accumulated wealth of the corporations that own them, would not have been possible without the willingness of regulators to favor particular firms and business models, and to protect these firms from competition under the rationale that these networks are “natural monopolies”.
Today's digital networks have been built on the wealth and market dominance that was made possible by protection from competition and the guaranteed rates of return that regulation permitted. Consequently, the property rights that have been afforded to network owners should be accompanied by responsibilities, namely, in the form of public service obligations.
