Susan P Crawford, Columnist

Nobel-Winning Message for the FCC

U.S. telecommunications policy makers long ago turned their backs on Nobel-winning economist Jean Tirole's sensible assessments of private communications utilities -- with disastrous results.

October 14, 2014 at 5:28 PM UTC

By Susan P Crawford

Susan Crawford, the John A. Reilly visiting professor in intellectual property at Harvard Law School, is the author of "Captive Audience." Her book "The Responsive City," with co-author Stephen Goldsmith, will be published in September. In 2009, Susan Crawford served as special assistant to President Barack Obama for science, technology, and innovation policy. She is a former law partner at Wilmer, Cutler & Pickering (now WilmerHale). She is the founder of OneWeb Day, a global Earth Day for the Internet held each Sept. 22. She earned a bachelor’s degree, summa cum laude, and a law degree from Yale University.

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Jean Tirole's Nobel Prize in Economic Sciences is being celebrated on both sides of the Atlantic by academics and economists. But there is no joy in the power circles of U.S. telecommunications policy. More than a decade ago, federal policy makers turned their backs on Tirole's sensible assessments of private communications utilities -- and with disastrous results.

Tirole's insight was that any company controlling physical lines into homes and businesses, left to its own devices, would act as a natural monopoly, extracting tribute from every other business and customer that depends on communications capacity. To constrain that power, regulators might need to separate wholesale and retail communications-access services, and require interconnection with other networks.