Introduction

On February 10, 2026, the American Enterprise Institute (AEI) gathered experts to discuss what we have learned after 30 years of the Telecommunications Act of 1996. The ’96 act has been the only significant amendment to the Communications Act of 1934, and it made fundamental changes to the country’s communications policies. It opened almost all markets to competition, some of which had government-protected monopolies for nearly a century. It also provided detailed rules to facilitate this competition. The ’96 act unwound 40 years of antitrust restrictions—originating from a 1956 consent decree and a 1984 Modification of Final Judgment—that had been placed on AT&T and its Bell operating company offspring that had been spun off in 1984.

How did this all work? What approaches to regulation and deregulation worked well and can serve as patterns for future regulatory decisions? And which approaches should never be used again?

To explore these and other questions, AEI brought together Reed Hundt, who was chairman of the Federal Communications Commission (FCC) when the ’96 act was signed into law; Professor John W. Mayo of Georgetown University; Ruth Milkman, who served as Hundt’s legal adviser; Adam Thierer of R Street; and Robert Quinn of AT&T. Senator Deb Fischer (R-NE) gave the closing keynote.

This volume contains chapters by Hundt, Fischer, Mayo, Thierer, and me. The conclusion summarizes what was said in the event. I am grateful to the authors, speakers, and AEI staff who made the event possible.

Two Approaches to Policy

One way to understand the chapters in this volume is to see them as representing two different approaches to telecommunications policy. Senator Fischer emphasizes a clear vision of the outcome she believes policy should achieve: reliable, high-quality broadband access for all Americans, including those in rural and geographically challenging areas. From this perspective, broadband connectivity is no longer a luxury but a prerequisite for participation in modern economic and civic life. Concerned that markets alone may not deliver this outcome, she emphasizes targeted government action to fill the gaps.

Hundt’s chapter shares elements of this outcome-oriented perspective. He emphasizes government’s role in shaping the direction of technological change and sharing the benefits widely.

In contrast, the chapters by Mayo, Thierer, and me emphasize the economic processes that generate innovation and investment. They focus on allowing the separate decisions of customers, service providers, employees, and investors to determine which services are created and used. In this view, competition and entrepreneurial experimentation are discovery mechanisms that reveal what technologies, business models, and services best meet consumer needs.

Reed Hundt: History Rhymes

Hundt argues that the policy experience surrounding the ’96 act offers important lessons. He reflects on how policymakers responded to the telecommunications and internet revolutions of the 1990s, contending that government actions during that period helped replace the old system of regulated monopolies with a framework that encouraged competition, technological innovation, and global expansion of American communications firms. Major accomplishments include the FCC’s use of spectrum auctions to launch the digital cellular industry, US leadership in opening global telecommunications markets through international negotiations, and the creation of the E-Rate program to connect schools and libraries to the internet.

At the same time, Hundt identifies several developments that he views as cautionary lessons for the AI era. He argues that policymakers underestimated the long-term consequences of Section 230 of the Communications Decency Act, which granted online platforms immunity from liability for user-generated content. He believes that this allowed harmful online behavior to proliferate with insufficient accountability. He also suggests that antitrust enforcement failed to anticipate the scale and influence of emerging technology platforms and that policymakers did not adequately anticipate the boom-and-bust investment cycle associated with the dot-com era.

Looking forward, he proposes that the United States respond to the rise of AI with a similarly ambitious policy framework. There should be a new Artificial Intelligence Commission—a bipartisan, expert body modeled in part on the FCC’s role in internet regulation during the 1990s. Such a commission could coordinate national policy on issues ranging from protecting children and privacy to managing workforce disruption, energy infrastructure for data centers, and US competition with China. In Hundt’s view, a proactive national strategy is necessary to ensure that the benefits of AI are widely shared and that its risks are responsibly managed.

Mark Jamison: When Regulation Meets Reality

I argue that the ’96 act’s most lasting successes occurred where it removed legal barriers to competition and innovation, while its most problematic provisions were those that attempted to manage competition and preserve outdated industry structures. Before 1996, telecommunications markets had been shaped by decades of government-sanctioned monopolies and regulatory boundaries that divided the industry into distinct categories, such as local versus long-distance service and computing versus communications. Technological change had eroded these distinctions, but regulation held them in place.

I conclude that the mixed results of the ’96 act provide important lessons for policymakers confronting emerging technologies such as artificial intelligence. The act’s attempts to engineer managed competition, particularly through detailed requirements for infrastructure sharing, produced years of litigation and slowed technological progress. In contrast, the most dynamic developments in the sector occurred where regulation receded and firms were free to experiment with new technologies and business models.

I draw several broader lessons from the results: Regulatory frameworks built around fixed technological categories are unlikely to survive rapid innovation, competition functions as a discovery process that policymakers cannot design in advance, and the most important policy decision is often what government chooses not to control.

Adam Thierer: Why the Telecom Act Was Essential yet Failed

Thierer argues that the ’96 act was both necessary and flawed. It was an important step toward dismantling the rigid regulatory structure that governed telecommunications for decades, but it ultimately fell short of delivering the reforms many hoped for. The ’96 act was marked by significant ambiguities and internal contradictions that left major questions unresolved and allowed regulators—particularly the FCC—to retain substantial discretion in shaping the industry’s future.

Despite these shortcomings, there were important successes where policymakers exercised restraint. By concentrating most of the statute’s regulatory mechanisms on legacy industries such as wireline telephony and cable television, the law effectively left emerging digital sectors—including the internet and related online services—relatively free from heavy regulation. This regulatory restraint, combined with provisions such as Section 230 of the Communications Decency Act and federal preemption of certain state and local barriers to entry, helped create an environment in which new technologies and business models could develop rapidly. In Thierer’s view, economic freedom enabled the growth of internet-based services, e-commerce, and mobile communications.

Yet the ’96 act failed to eliminate the complex legacy regulatory silos. This allowed the FCC to micromanage industry structure through detailed rules on network sharing and pricing. The result was a prolonged period of regulatory disputes, litigation, and policy uncertainty that slowed the transition to fully competitive markets. Policymakers should revisit the unfinished business of telecommunications reform by reducing outdated regulatory mandates, reconsidering the scope of the FCC’s authority, and ensuring that future technologies—including artificial intelligence—are not subjected to the same type of regulatory expansion that characterized communications policy.

John W. Mayo: Reflections at 30 Years

Mayo examines the forces that led to the passage of the ’96 act and assesses its economic legacy. He argues that major policy change tends to occur when an industry’s underlying equilibrium—among technology, competitors, and regulators—breaks down.

Such a disequilibrium emerged following the 1984 breakup of AT&T. The divestiture unleashed new long-distance competitors using new technologies, while AT&T and the Bell operating companies found themselves constrained by regulatory boundaries that limited their ability to compete. Regulators faced an increasingly fragmented and outdated regulatory structure. These pressures coincided with a broader political climate favorable to deregulation and competition, creating the conditions for Congress to act.

Assessing the ’96 act’s economic effects is challenging because the legislation coincided with rapid technological change, including the rise of the internet and mobile communications. That said, several broad indicators point to substantial gains for consumers and the broader economy. Prices for communications services have declined significantly, while the range and quality of services have expanded dramatically. Usage has surged, and the industry has attracted extraordinary levels of private investment—more than $2 trillion since the act’s passage—to support new infrastructure and innovation. While the ’96 act helped establish a competitive and investment-friendly environment that generated substantial benefits, policymakers must remain attentive to preserving the conditions that allow innovation and competition to continue.

Deb Fischer: Broadband Policy Agenda

Senator Fischer outlines a policy agenda focused on closing the digital divide. She emphasizes that dependable internet connectivity has become essential for modern life, as it underpins education, telehealth, small-business development, and precision agriculture. Because many rural and geographically challenging areas lack the population density needed to attract private investment, she argues that federal policy must play an active role in ensuring that rural communities are not left behind.

A central element of Senator Fischer’s approach is modernizing the Universal Service Fund (USF), the long-standing federal program that provides financial support for high-cost and underserved geographic areas. She is co-leading a bipartisan, bicameral working group examining how the USF should be updated, focusing on ensuring the program is sustainable, legally durable, and effectively targeted. This includes reassessing key components of the USF, such as programs targeting rural communities, schools and libraries, healthcare providers, and low-income households.

She also emphasizes the importance of effective implementation of the Broadband Equity, Access, and Deployment (BEAD) program established by Congress in 2021. While she supports the significant federal investment, she stresses that states must retain flexibility in determining how funds are used. In her view, broadband policy should not impose a single technological solution from Washington but instead allow states to deploy a range of technologies suited to their geographic and economic conditions.

Where the Chapters Differ and Converge

While the authors broadly agree on the importance of the ’96 act and the subsequent transformative changes, they differ in how they evaluate government’s role in shaping those outcomes. One point of disagreement concerns the FCC’s efforts to manage competition in the years immediately following the ’96 act. Hundt views the agency’s interconnection requirements, pricing rules, and limits on incumbent firms as necessary steps to ensure competition. By contrast, Thierer and I argue that these efforts represented the least successful elements of the ’96 act. In our view, policies such as mandatory network unbun­dling and complex pricing formulas produced extensive litigation and regulatory complexity while doing little to encourage competition or innovation.

The authors also diverge in their views about how the lessons of the telecommunications transition should inform policy for emerging technologies such as artificial intelligence. Hundt sees the 1990s regulatory experience as evidence that proactive government leadership can guide technological revolutions in beneficial directions. Thierer and I reach the opposite conclusion, warning that attempts to design market outcomes through regulatory planning fail in fast-moving environments.

Yet the authors share several important points of agreement. First, all agree that the pre-1996 regulatory regime had become outdated and unsustainable. Rapid technological change and growing competitive pressures had rendered the system increasingly dysfunctional and, as Mayo said, a fragmented disequilibrium. The legacy system had become economically fragile and legally complex.

The authors also agree that the rapid pace of technological change quickly outstripped many of the regulatory categories embedded in the ’96 act. The law was written around distinctions such as local versus long-distance service and telecommunications versus information services that were rapidly overtaken by the rise of the internet, wireless networks, and broadband technologies. The technological convergence erased the boundaries that regulation had attempted to maintain.

Finally, the authors broadly agree that the most successful elements of the post-1996 communications landscape arose where policy allowed markets to operate and technological experimentation to flourish. Although they differ in their interpretations of specific provisions, each author recognizes that the shift away from monopoly regulation toward greater competition coincided with dramatic economic and technological progress, and the United States emerged as a global leader in digital technologies, supported by an ecosystem in which firms were able to experiment, invest, and scale new services in response to consumer demand.