| 来源类型 | Article
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| 规范类型 | 评论
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| The FCC’s Duty |
| J. Gregory Sidak
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| 发表日期 | 2002-10-08
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| 出版年 | 2002
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| 语种 | 英语
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| 摘要 | WASHINGTON–Late last month the former controller of WorldCom pleaded guilty to criminal fraud in connection with the company’s accounting scandal and bankruptcy. It has also come to light that government reports unintentionally dignified WorldCom’s incorrect claim that Internet traffic was doubling every 100 days. The government thus contributed to the hype that caused billions of dollars to be invested in long-distance fiber optic networks that go unused. Federal and state law enforcement agencies have been investigating WorldCom. The Federal Communications Commission, which regulates the industry, has the authority and the responsibility to do so as well.
The F.C.C. regulates communications by wire–telephones and cable TV–and by radio transmission. Wireless communications requires an F.C.C. license, and even the common carriage of voice and data over wired networks must be certified. Some common carriers–telephone companies–use wireless, and so they need both a certificate and a license. Thus the F.C.C. has the power to deny or revoke certification or licensure.
By statute, good “character” is a requirement for holding a wireless license. Under F.C.C. rules, you don’t have to be a criminal to lack good character. Although character issues usually have involved radio or TV broadcasters, the F.C.C. has investigated wireless common carriers as well. For example, the F.C.C. refused to license a company that concealed the fact that it started building transmitter towers before the agency approved the construction.
The F.C.C. authority in monitoring the conduct of its licensees should be brought to bear on the WorldCom case. At a minimum it should issue a “notice to show cause” that would require WorldCom to demonstrate why the agency should not revoke all of its licenses and certifications.
If stripped of its licenses and certifications, WorldCom would lose its value as a going concern and probably be forced into liquidation. There is always a temptation to give a bankrupt company–particularly a very large company–a second chance. But in WorldCom’s case, a second chance holds little promise. Its brand name is probably worthless because of the taint of fraud, and many of its more capable managers are likely to jump ship. The revelations of more than $7.4 billion in accounting irregularities increase the risk of massive liability for any potential buyer of WorldCom as a business. The idea that WorldCom can be rehabilitated is a mirage.
The F.C.C. may be tempted to oppose WorldCom’s liquidation in the name of preserving competition. That too would be a mistake. With so much excess capacity in long-distance networks, other carriers will eagerly court WorldCom’s customers. And since December 1999 local Bell operating companies have gotten regulatory approval to provide long-distance service in states with almost half of the nation’s telephone access lines. More approvals are expected soon. The Bells are well positioned to replace WorldCom as a competitor of carriers like AT&T and Sprint.
After the enactment of the Telecommunications Act of 1996, the F.C.C. closely scrutinized the accuracy of information supplied to it by the Bell companies, whose networks it was trying to open to competition. At the same time, the agency was oblivious to the enormous accounting fraud at WorldCom, a principal beneficiary of those market-opening efforts. Keeping WorldCom on life support now would compound the problem. The F.C.C. should promptly determine whether the fraud at WorldCom should trigger the surrender of its licenses and authorizations.
J. Gregory Sidak is a resident scholar at AEI. |
| 主题 | Economics
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| URL | https://www.aei.org/articles/the-fccs-duty/
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| 来源智库 | American Enterprise Institute (United States)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/238092
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推荐引用方式
GB/T 7714 |
J. Gregory Sidak. The FCC’s Duty. 2002.
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