chevron-down Created with Sketch Beta.
August 13, 2019

Chair’s Column

By Mark C. Darrell

The Spring issue of Infrastructure presents two articles that impact those of us who are practicing infrastructure lawyers. The first article addresses the intersection of government regulation and technological advancement and the age-old question of whether markets, and ultimately consumers, are served better by continued regulation or deregulation. Chair-Elect Chris Binnig, Tyson Covey, and Kara Gibney discuss a recent court decision affirming a Federal Communications Commission order in which the FCC withdrew from its regulation of business data services (those high-speed, high-capacity, point-to-point connections between larger customers and their long-distance telecommunications service providers over which those business customers send and receive long-distance telecommunications traffic). The second article, by Jay Range, discusses the latest Supreme Court decisions on arbitration provisions in employment agreements.

Of particular interest to me is the governmental decision of continuing regulation versus deregulation because basic principles that drive government regulation of infrastructure industries are typically at play when those decisions are made. One typically starts from the basic assumption that the competitive marketplace is the most economically efficient way to allocate scarce resources. When considering markets in which market failures have previously occurred and in which government regulation already exists, the question becomes whether withdrawal of government regulation will result in an improvement in the allocation of resources. When a market failure has not occurred and the market has not been regulated previously, would extending regulation to such markets be better for consumers and constitute a suitable substitute for competition? Dr. Charles F. Phillips Jr., in his seminal 1984 book The Regulation of Public Utilities, stated the question succinctly:

Since competition is relied upon to promote the public welfare, the market is the central institution regulating economic activity. But it has been long accepted that some industries, in which competition is not fully effective, must be regulated by the government to protect the public interest. “Here the visible hand of public regulation was to replace the invisible hand of Adam Smith in order to protect consumers against extortionate charges, restrictions of output, deterioration of service, and unfair discrimination.”1

What is best for consumers is at the essence of the FCC’s decision. The authors note that the ultimate question is whether the FCC’s decision to deregulate certain business data services will result in increased investment and competition, both of which should redound to the benefit of consumers. As infrastructure practitioners, we will, I’m sure, be closely monitoring the consequences of this decision and other recent governmental efforts around the country to reposition the “visible hand of public regulation.”

Once again, I would like to thank Bill Drexel, the editor of Infrastructure, for presenting yet another fine set of articles that address the intersection of government policy, technology, and the development of infrastructure industries.


1.  Charles F. Phillips Jr., The Regulation of Public Utilities 3 (quoting Walter Adams, The Role of Competition in the Regulated Industries, 48 Am. Econ. Rev. 527 (1958)) (1984).

The material in all ABA publications is copyrighted and may be reprinted by permission only. Request reprint permission here.

By Mark C. Darrell