Page 171 - Communication Commerce and Power The Political Economy of America and the Direct Broadcast Satellite

7 Capital, Technology and

the United States in an

'Open Market' Regime

United States domestic reforms have had anticipated and unanticip-
ated implications for the international political economy. For ex-
ample, the AT&T settlement was largely driven by the desire to
create a more competitive US telecommunications market that, in
tum, theoretically would reduce equipment and services costs for
domestic (primarily business) customers. With the formation of the
RBOCs and the ongoing liberalization of the American equipment
market, the standardisation of hardware and software that had been
imposed by AT&T's market dominance was replaced by a state of
technological fragmentation. This, and the relative low cost and high
quality of equipment produced overseas, generated a sharp rise in
foreign imports. Moreover, the opening up of this market compelled
the increased involvement of government agencies into communica-
tion policy, including more participation by officials from the Depart-
ment of Justice, federal courts and by state government regulators.
The growing number and diversity of agents participating in the
behavioral and structural regulation of domestic developments, in
conjunction with the growing convergence of foreign and domestic
communication activities, exacerbated concerns regarding the policy-
leadership vacuum in Washington. This was a pressing issue due not
only to the inroads that overseas manufacturers were making into the
American market but, more generally, its seriousness involved the
belief that a historic opportunity to exploit the most significant pro-
spective growth sector in the US economy could well remain unrea-
lized.1 As Jane Bortnick reported to Congress in 1983,

other nations have been able to capitalize on American
innovations to develop commercial products with comparable or
higher quality and value without a heavy investment in basic
research and development. At the same time ... actions by
foreign governments to increase regulatory controls on
telecommunications and information activities, erect protectionist

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