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By Barbara A. Cherry

My interest with the commercial potency and social merits of provisions utilized by telecommunications vendors to restrict their legal responsibility to buyers for damages coming up from carrier interruptions and community outages is a longstanding one. it all started with the altering kingdom regulatory environments within the past due 1980's whereas representing AT&T as an legal professional prior to a variety of kingdom legislatures within the Midwest. As telecommunications providers confronted the ramifications of deregulation, a number of criminal effects got here to the fore. One vital end result was once the impression of adjusting regulatory ideas and necessities at the providers' skills to proceed to restrict their legal responsibility for damages to buyers in a non-tariffed global. consequently, one in all my obligations whereas hired by means of AT&T was once to syek legislative aid in a few kingdom jurisdictions which might allow the continuing use of restricted legal responsibility provisions although different deregulatory advancements within the undefined. In my capability as an legal professional, I succeeded during this activity within the few jurisdictions for which i used to be given the cost. despite the fact that, as an economist, those efforts piqued my curiosity concerning the monetary results of such restricted legal responsibility provisions on shopper pursuits. What legal responsibility ideas for the would actually larger serve basic societal pursuits? As my occupation developed, which concerned returning to graduate institution to pursue my Ph. D. and changing into the Director of Public coverage stories at Ameritech, I had the chance to pursue interdisciplinary learn in telecommunications coverage issues.

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Additional resources for The Crisis in Telecommunications Carrier Liability: Historical Regulatory Flaws and Recommended Reform

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C. Circuit Court of Appeals issued a stay, and the appeal is still pending. The FCC adopted a policy of mandatory detariffing because it concluded that "tariffs are not necessary to ensure that the rates, practices, and classifications of nondominant interexchange carriers for interstate, domestic, interexchange services are just and reasonable and not unjustly or unreasonably discriminatory" (par. 21). In this regard, the FCC found that tariffs are not necessary to protect consumers (par. 36), that requiring the filing of tariffs may harm consumers by impeding competition and leading to higher rates (par.

Therefore, in its mandatory detariffing order, the FCC repeated several of the flaws embedded in its earlier orders affecting telephone company limited liability provisions: improper reliance on Western Union v. Esteve Bros. and the filed rate doctrine; failure to analyze the economic efficiency effects of its order; and inadequate consideration of the effect of its order on the ability of carriers to fulfill their other regulatory obligations. However, evidently unaware of the logical inconsistencies contained in its order, this time the FCC arrived at a different conclusion - that elimination of limited liability tariff provisions was now in the public interest.

As for the most frequently used justifications, it was shown that reliance on both Western Union v. Esteve Bros. and the filed rate doctrine has been inappropriate, and that the regulatory contract theory is factually inaccurate. But, important questions are why these flawed justifications arose and why they have persisted for so long. This chapter provides an explanation based on an historical review of key legal institutional developments. In particular, this chapter discusses the evolution of legal institutional processes and concepts which created an environment conducive to the development of these traditional justifications for upholding telephone company limited liability practices, and, once made, for their persistence over time.

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