Federal Preemption and State Regulation of Transportation and Telecommunications

Transportation and telecommunications are two of the most importantinfrastructural industries in the American economy. As theseindustries are so vital and because they exhibit characteristicsthat have frequently rendered them quasi-monopolistic, theirgrowth has been accompanied by state and federal regulation.We document how the imposition of regulation has led to continualconflicts over the extent to which federal regulation shouldtake precedence over state regulation. We illustrate how thejustifications for federal preemption have been applied notonly to the regulation, but also to the recent deregulation,of railroads, trucking, and telecommunications. We contend thatpolitical factors, such as congressional support, precedent-settingcourt rulings, and, most important, political pressure fromaffected interest groups that is related to the revenues stillgenerated within states by these industries, ultimately determinethe form of preemption that emerges from the Congress.     

FCC v. The States: Who Shall Regulate Intrastate Telecommunications?

The 1934 Communications Act established a dual system of federaland State telecommunications regulation. The act gave the FederalCommunications Commission (FCC) authority to regulate interstateand foreign telecommunications but not intrastate communications,a market reserved for the states. As part of its move to deregulatethe telecommunications market in the 1970s, the FCC sought toextend its jurisdiction by preempting state regulatory authorityover telecommunications activities traditionally consideredintrastate. In 1986, however, the U.S. Supreme Court, in itsdecision in Louisiana Public Service, restricted federal preemptionof state laws and reinforced the dual regulatory system. Withthe break-up of AT&T, the FCC has renewed its preemptionactivities, claiming that the preemption is necessary in orderto foster an efficient nationwide telecommunications system.Several cases now pending in federal courts will test the breadthand depth of the Supreme Court's holding in Louisiana PublicService, and thereby, the future of the dual regulatory system.     

Withering in the Heat? In Search of the Regulatory State in the Commonwealth Caribbean

This article explores the “regulatory state hypothesis” in the context of electricity and telecommunications regulation in Jamaica and Trinidad and Tobago. This article questions whether institutional features associated with the regulatory state are triggered by a preference for efficiency and added complexity within the policy domain. This article progresses in three steps. After setting out the regulatory state hypothesis as derived from the work by Giandomenico Majone and its empirical consequences, the article explores the four cases in brief. Although the empirical evidence broadly supports the regulatory state hypothesis across domains, states and over time, some puzzles in terms of reform trajectories and extent of regulatory reform do emerge. The final section explores these puzzles through an actor‐centered institutional perspective. It is suggested that the “regulatory state hypothesis” may be useful for predicting institutional arrangements, but has difficulty in accounting for the extent of regulatory reform and timing.     

Seeds of an Asian European Union? Regionalism as a hedge against the United States on telecommunications technology in Japan and Germany

Abstract

Germany and Japan have both used regionalism as a hedge against American power in the area of telecommunications, but this strategy has taken very different forms. Germany's regionalism is within the European Union. Since 2002 Japan has developed an ad hoc technology alliance in telecommunications with China and South Korea. Both the European Union and Northeast Asian countries have used industrial policy to promote telecommunications technology and both regional organizations have expressed concern about American dominance in telecommunications. Both Germany and Japan have looked to their lower income neighboring countries for investment opportunities in telecommunications, but each has taken a different approach. Japanese telecommunications firms have not been very successful in investing in other countries or in exporting Japan's very sophisticated and expensive telecommunications equipment. The Japanese government and business organizations have taken the lead in trying to promote joint research and pursue development of joint standards. Germany's Deutsche Telekom has been much more active than Japanese firms in international investment. The European Union differs from the Northeast Asian group in that it has pressed Germany to keep its domestic telecommunications market open and to make Deutsche Telekom compete internationally. It is surprising that China, Japan and South Korea have reached out to each other to cooperate on technology and standards development despite longstanding mutual antagonisms. The Northeast Asian agreements on telecommunications recall the European Coal and Steel Community (ECSC) of 1952, an initiative that also sought to link economically states divided by deep resentments. Like the ECSC, the current Asian initiative targets some of the most important economic sectors of the day. However, strong market pressures tend to undermine cooperation, and it is uncertain how much impact the agreements on telecommunications will really have.     

Globalization,International Organizations,and Telecommunications

Since the 1990s over 158 countries established pro‐market reforms in telecommunications—a fast pace for such a drastic change. For example, Sweden and Botswana, two nations vastly different across multiple dimensions, both liberalized their telecom sectors. Why did so many countries adopt liberal reforms in such a short period of time? Conventional wisdom highlights the role of global markets and technology, powerful states, global diffusion, and domestic politics. I argue that contrary to these claims, diffusion through key international organizations is the critical and overlooked factor in explaining rapid global convergence of pro‐market telecom reforms. Using an original dataset for 189 countries between 1970 and 2003 and event history analysis, I demonstrate that membership in key liberal trading organizations, especially the WTO and the OECD, increases the likelihood that countries will adopt liberal pro‐market reforms in telecommunications. These results speak directly to current public policy debates about the reregulation of global markets and bridges the literatures of policy diffusion, institutional design, and regulatory regimes.     

Politicians,Media Moguls and PayTV: Pay‐TV Policy‐making in Australia 1977‐1995

This article explores the major influences on pay‐TV policy‐making in Australia from the late 1970s, when the issue was first discussed in the context of proposals to establish a domestic communications satellite, up until the introduction of pay‐TV in Australia in 1995, thereby placing current developments in the pay‐TV industry in context. The article argues that among larger broadcasting and telecommunications issues, pay‐TV has never been ‘the main game’. For both Coalition and Labor governments, the expansion of existing free‐to‐air television services in regional Australia and the introduction of competition in telecommunications have been much more important policy priorities than the introduction of pay‐TV. Furthermore, because pay‐TV policy‐making largely took place in this wider policy context, the structure of the broadcasting and telecommunications industries also shaped pay‐TV policy outcomes.     

Nations or Sectors in the Age of Globalization: China's Policy Toward Foreign Direct Investment in Telecommunications

Scholars debate whether states or markets drive economic policy in the context of internationalization. Unpacking the market–state dichotomy, liberal pluralists and institutionalists alike conduct sectoral analysis to examine economic policies and outcomes. They debate the relative importance of sectors versus factors and the impact of sectoral coalitions, structural characteristics, and institutional trajectories. Building on previous scholarship, this article argues that state imperatives, such as national security and technological advancement, are an important guide to understanding dominant patterns of economic policy, defined as state goals, government–business relations, and state methods. Beyond that, the organization of institutions and structural sectoral attributes influence the ways in which actual policy outcomes vary across sectors and time. Case studies of the liberalization and subsequent reregulation of foreign direct investment across subsectors of telecommunications in China substantiate this argument. Evidence from other industries further validates this explanatory model.     

Sanction Power, Jurisdiction, and Economic Policy-making: Explaining Contemporary Telecommunications Policy in Japan

Variation in policy-making is an important analytical issue in public policy analysis, but it has not been extensively discussed in the literature on Japanese politics and political economy. Focusing on the interaction between state and societal actors, this article presents a causal argument to account for variation in Japanese economic policy-making. It is argued that variation in policy-making patterns is determined by the strength of a bureaucracy's sanction power and the exclusivity of its jurisdiction. This argument is elaborated through analysis of four related cases of Ministry of Posts and Telecommunications (MPT) policy-making: the privatization process of Nippon Telegraph and Telephone (NTT), the regulation of telecommunications after NTT privatization, the promotion of advanced telecommunications, and the reorganization of NTT. The causal framework is also applied to contemporary Ministry of International Trade and Industry economic policy-making to highlight the argument's preliminary applicability to Japanese policy-making. This analysis of Japanese policy-making lays a base for further analysis of variation in policy-making in general.     

Steering through Complexity: EU Environmental Regulation in the International Context

The nature of governance in the European Union (EU) and its member states is continuing to evolve as the EU develops. This paper focuses on the challenges to this governance process in the sector of environmental policy, and particularly the role of external organizations and states in providing alternate policy fora. The policy impact of these institutions and organizations leads to more actor participation in a way that EU players may not be able to anticipate or control since the EU is only one of several arenas involved. Both states and non-governmental actors actively seek to shift issues to arenas that provide them advantages. Consequently, developments in other arenas shape and are shaped by EU issues as actors pursue forum shopping. The paper presents two cases, the amendment of the Basel Convention to ban hazardous wastes export and the EU regulation of chemical risk, which demonstrate how external players can shape EU regulation.     

Liberalization as a Development Strategy: Network Governance in the Korean Mobile Telecom Market

This study analyzes Korea's often noted yet seldom studied spectacular rise to become one of the important global players in the mobile telecommunications industry. The Korean “leap frog” occurred in the context of liberalization under the worldwide liberal telecommunications regime. This article finds that network governance—the emphasis on the use of partnerships and network transactions with global firms as well as the local private sector—is the reason for Korea's success. It examines the origins of and driving forces acting upon the liberalization policy, and discusses how the state and telecom firms cooperated to develop the mobile market. It also assesses the new governance that is taking place in Korea's telecom market by focusing on the changing roles of the state in three major aspects: provision, regulation, and foreign entry barriers into the mobile market. While the Korean government promoted a market‐conforming telecom market and private ownership, this article argues, it formulated rather different governance principles from the U.S. model of liberal governance.     

The European Politics of Book Pricing

Scholars are increasingly concerned with the phenomenon by which successive policy areas in Europe become 'communitarised' - by which we mean that the sector's governance increasingly takes place at the supranational level. As was the case for the environment or the telecommunications sector, no formal competence on book policy, and more generally on cultural policy, appeared in the original treaty, and hence I seek to explain why and how the communitarisation of the policy debate on book prices took place. On the one hand, the European Court of Justice and the Commission, which benefited from the complicity of subnational private actors, were making use of their judicial and regulatory powers in order to liberalise the book sector. On the other hand, member states which felt that their policy traditions were challenged by European intervention tried to shift the decision-making process back to an intergovernmental mode in an attempt to impose an alternative policy solution, treating books as a special product. The main argument that is put forward in this article is that once the locus of the decision-making process had shifted de facto towards the EU level, the diversity of actors' preferences, decision rules and the nature of the status quo made it impossible for the tenants of dirigiste solutions to impose their policy preferences.     

Neo-conservative regimes and convergence in telecommunications policy

Abstract. Starting from the proposition that neo-conservative governments would wish to increase competition in the telecommunications market and that socialist governments would wish to retain a network monopoly which protects small consumers, this paper explores telecommunications policy in a number of industrialised countries. It argues that there is little convergence between policies adopted by neo-conservative regimes and that socialist governments are as likely to liberalise or privatise the telecommunications monopoly. A number of explanatory variables are explored, including federalism, trade union strength and industrial policy goals. The article concludes that the conjuncture of political and economic interests in any one country is likely to be different from that in any other. These conjunctures determine outcomes in policy terms and no country is likely to follow closely American experience in liberalisation.     

Primacy Implementation of Environmental Policy in the U.S. States

Environmental regulation is frequently implemented through asystem that allows states to choose whether to assume primaryauthority, or "primacy," for implementation and enforcement.This study looks at what causes states to assume this authorityin two important areas of environmental policy: air and waterpollution. It finds that in each policy area, primacy assumptionis unrelated to the "greenness" of state environmental policygenerally and negatively related to indicators of policy innovationwithin that area. Rather than being driven by commitment tothe environment, primacy assumption appears to be driven predominatelyby other factors, which differ substantially across the airand water policy arenas. These findings call into question thewidely held view that primacy assumption is an indicator ofstate environmentalism and indicate that a more nuanced viewof what causes states to assume primacy is necessary to fullyunderstand the dynamics of intergovernmental policy implementation.     

Europeans outside the EU: Telecommunications and Electricity Reform in Norway and Switzerland

Norway and Switzerland are two western Europe states that are not members of the European Union (EU), and they are among a number of small and economically open states in which reform of economic sectors is seen to be incremental and reactive. This article poses two questions about the reform of telecommunications and electricity in the two countries. First, what impact has nonmembership of the EU had on the reforms? Second, have their small and open economies and policymaking systems—conceptualized as “social corporatism” in Norway and “liberal corporatism” in Switzerland—had a decisive impact? Some influence from the EU is evident, particularly in telecommunications, but parallels with EU states indicate that nonmembership of the EU, though influential, is not decisive. Although national characteristics matter, social and liberal forms of corporatism are shown to have limited utility. The “actor‐centered institutionalism” approach, which allows a more nuanced analysis of actors and national institutions, is better at explaining the reforms.     

Short Circuit: Federal-State Relations in the California Energy Crisis

This article examines the changing roles of the federal andstate governments in electricity regulatory policy, includingthe history of electricity regulation and the development ofstate and federal regulatory powers. The case of Californiasuggests that deregulation has elevated the role of federalregulators and increased their responsibility to protect theinterests of the states beyond those of the market. The inabilityof the Federal Energy Regulatory Commission to protect Californiafrom predatory market manipulation demonstrates the necessityfor states to plan carefully to protect their multiple policyinterests.     

Understanding State Rulemaking Processes: Developing Fracking Rules in Colorado,New York,and Ohio

Rulemaking is an integral component of environmental policy at both the federal and state level; however, rulemaking at the state level is understudied. With this research, we begin to fill that gap by focusing on rulemaking regarding the issue of hydraulic fracturing (fracking) in three states: Colorado, New York, and Ohio. This policy issue is well suited to begin exploring state‐level rulemaking processes because the federal government has left fracking regulation to the states. Through semistructured interviews with a range of actors in the rulemaking process across these states, we establish a foundation from which future research in this area may build. This exploratory research yields some valuable insights into the roles different stakeholders are playing in regulating fracking in these three states, and our findings may be useful for explaining state‐level rulemaking more generally.     

Agenda‐Setting at the Energy‐Water Nexus: Constructing and Maintaining a Policy Monopoly in U.S. Hydraulic Fracturing Regulation

Despite calls to increase federal oversight of hydraulic fracturing (HF), the U.S. Congress has maintained a regulatory system in which environmental regulatory authority is devolved to the states. We argue that this system is characterized by a long‐standing “policy monopoly”: a form of stability in policy agenda‐setting in which a specific manner of framing and regulating a policy issue becomes hegemonic. Integrating theories on agenda‐setting and environmental discourse analysis, we develop a nuanced conceptualization of policy monopoly that emphasizes the significance of regulatory history, public perceptions, industry–government relations, and environmental “storylines.” We evaluate how a policy monopoly in U.S. HF regulation has been constructed and maintained through a historical analysis of oil and gas regulation and a discourse analysis of eleven select congressional energy committee hearings. This research extends scholarship on agenda‐setting by better illuminating the importance of political economic and geographic factors shaping regulatory agendas and outcomes.     

LONG TERM CARE REGULATION IN THE STATES: A SYSTEMIC PERSPECTIVE

In recent years there has been growing interest in differing state roles in the regulation of the health care industry. Most of this attention has stressed the impact of regulatory policy with only superficial attention directed towards understanding the extent to which states can be counted on to act effectively in the area of health care regulation. Using the regulation of nursing homes as a focus, this study evaluates a variety of sociocultural, political, and economic conditions for their impact on the development of various regulatory policies. The findings suggest that the development of certificate of need legislation and reimbursement controls were not related to significant changes ir, states' budgets for Medicaid services or in bed/population ratios. Instead, regulatory efforts were more closely linked to the sociopolitical environments surrounding the policy arena. While these factors provide some indication of the potential for strong state action in the regulatory arena, ultimately the use of state regulatory policies will depend quite centrally on the innovative tendencies of the state, its organizational capacity for addressing policy issues, and the nature and extent of interest group politics.     

The National Minimum Drinking-Age Law

The National Minimum Drinking-Age Act of 1984 was hailed bysome observers as a welcome and appropriate exercise of federalpower. However, the act also constituted an invasion of states'rights. The act stipulates a minimum legal age of 21 for thepurchase or public possession of any alcoholic beverage, andincorporates sanctions against states whose laws are not incompliance. This article evaluates the constitutional basesfor federal intergovernmental regulation in a policy area dominatedby states since the repeal of prohibition in 1933 by the Twenty-FirstAmendment. It also considers the effectiveness of policies designedto prevent alcohol-related highway deaths, and the relativemerits of federal incentives or penalties to induce desiredbehavior by the states. The article concludes that the states,for which the Reagan administration's early theme of decentralizationwas so promising, may continue to find both their federal fundsand individual autonomy seriously compromised in the foreseeablefuture.