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Regulatory Governance and the Implementation of Universal Service: A Comparative Study of the US and Japan
Unformatted Document Text:  Tracking Number: ICA-1-11804 Regulatory Governance and Universal Service 19 almost all cases. 19 The US Senate has dual-member districts (states), but each senator is elected in a separate election, again nearly always on the basis of a plurality of the votes (Noll & Rosenbluth, pp.122-123). Finally, a major difference regarding policy decision-making process compared to that of Japan is that the existence of independent regulatory body for telecommunications. The Federal Communication Commission (FCC) of the US organizes and regulates all telecommunications policies including prices, equipment standards, and services. Although the FCC is the leading regulator at the federal level, Congress oversees the FCC and can intervene to pass legislation related to telecommunications. In addition, the FCC decisions are subject to judicial review, meaning that the FCC has to consider the possibility of review even when no appeal is actually made (Vogel, 1996, pp.218-219). Furthermore, there are several other regulatory bodies that have different responsibilities on the telecommunications issues. The National Telecommunications and Information Administration (NTIA) within the Department of Commerce manages the federal governments’ use of radio spectrum and it serves as principal advisor to the president on telecommunications and information policy and enunciates broad telecommunications policies. The Department of Justice is responsible for telecommunications matters that raise possible antitrust issues. In addition, the Federal Trade Commission (FTC) has responsibilities for issues that fall within their jurisdiction such as consumer protection (OECD, 2001). In this situation, regulation should be to facilitate the effective operation of markets and competition can be strengthened by antitrust litigation and their enforcement. The FCC, the regulator of universal service, can employ juridical regulation by adding more detail to existing regulation by putting tacit rules into written form, or by putting administrative rules into legal form (Vogel, 1996). They may do so in order to cope with the growing complexity of markets or to adjust to more rigorous regulatory standards. This process of policy-making helps formalize consultation or improve procedures to ensure accountability (Vogel, p.17). Moreover, the US officials do not assume that government intervention is inherently legitimate, but feel that it requires a specific rationale. Their main role is to implement fair rules of competition between market players and then leave players to compete with freedom. Thus, the proper degree of intervention should be low and the goal of intervention is to encourage efficiency (Vogel, p.45). These natures of the US institutional system and regulatory incentives undoubtedly make policy- making procedures for universal service formalized and changed slowly. Without clear and specified methods for the implementation, the policy-making processes and decisions of the FCC 19 For more details about the electoral system of the US and Japan, see Cox and Rosenbluth (1995).

Authors: Park, Namkee.
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Tracking Number: ICA-1-11804 Regulatory Governance and Universal Service 19
almost all cases.
19
The US Senate has dual-member districts (states), but each senator is elected
in a separate election, again nearly always on the basis of a plurality of the votes (Noll &
Rosenbluth, pp.122-123).
Finally, a major difference regarding policy decision-making process compared to that of
Japan is that the existence of independent regulatory body for telecommunications. The Federal
Communication Commission (FCC) of the US organizes and regulates all telecommunications
policies including prices, equipment standards, and services. Although the FCC is the leading
regulator at the federal level, Congress oversees the FCC and can intervene to pass legislation
related to telecommunications. In addition, the FCC decisions are subject to judicial review,
meaning that the FCC has to consider the possibility of review even when no appeal is actually
made (Vogel, 1996, pp.218-219). Furthermore, there are several other regulatory bodies that
have different responsibilities on the telecommunications issues. The National
Telecommunications and Information Administration (NTIA) within the Department of
Commerce manages the federal governments’ use of radio spectrum and it serves as principal
advisor to the president on telecommunications and information policy and enunciates broad
telecommunications policies. The Department of Justice is responsible for telecommunications
matters that raise possible antitrust issues. In addition, the Federal Trade Commission (FTC) has
responsibilities for issues that fall within their jurisdiction such as consumer protection (OECD,
2001).
In this situation, regulation should be to facilitate the effective operation of markets and
competition can be strengthened by antitrust litigation and their enforcement. The FCC, the
regulator of universal service, can employ juridical regulation by adding more detail to existing
regulation by putting tacit rules into written form, or by putting administrative rules into legal
form (Vogel, 1996). They may do so in order to cope with the growing complexity of markets or
to adjust to more rigorous regulatory standards. This process of policy-making helps formalize
consultation or improve procedures to ensure accountability (Vogel, p.17). Moreover, the US
officials do not assume that government intervention is inherently legitimate, but feel that it
requires a specific rationale. Their main role is to implement fair rules of competition between
market players and then leave players to compete with freedom. Thus, the proper degree of
intervention should be low and the goal of intervention is to encourage efficiency (Vogel, p.45).
These natures of the US institutional system and regulatory incentives undoubtedly make policy-
making procedures for universal service formalized and changed slowly. Without clear and
specified methods for the implementation, the policy-making processes and decisions of the FCC
19
For more details about the electoral system of the US and Japan, see Cox and Rosenbluth (1995).


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