The "Internet bubble" is not the prime culprit for the surplus capacity in the telecommunications industry. The surplus capacity in the telecommunications networks was a direct result of the Telecommunications Act of 1996, which for the first time allowed real competition in telecommunications in areas other than long distance and cellular services. Without that act of Congress, there would have been no surplus capacity, because there would have been no new entrants into the market, and there would have been no need for the regional Bell operating companies (RBOCs) to upgrade to more modern equipment to meet the new competition.  The combination of the RBOCS upgrading and the new entrants buying equipment for competitive networks caused the telecommunications boom of the late 1990s, but also caused the overcapacity that is haunting it today.

The "Internet bubble" is also not the prime culprit for the weak economy.  The Internet stock bubble was a result of some fundamental economic factors, some of which are also key factors in the current weakness. For example, there was a significant expansion of the money supply between 1997 and 2000 due to the Federal Reserve's and other central banks' actions to contain a monetary crisis that started in Asia and was spreading to Russia and South America. The collapse of a huge hedge fund (Long Term Capital) caused the Federal Reserve to further increase the money supply to avoid a banking crisis.  The expanded money supply was recycled into the stock market and created the "bubble".  It also fueled the capital expenditure boom, helping to create the overcapacity in telecom and elsewhere in the economy.  Economy-wide overcapacity is a classical cause for economic weakness.

There is no lack of clarity in the rules set into law by the Telecommunications Act of 1996 and interpreted by the FCC, although they may be incomprehensible to some journalists. The rules were only too clear for the RBOCs, who for obvious reasons did not want to cede their comfortable local monopolies.  The RBOCS fondly hoped that with the recent Bush appointees on the FCC, the FCC would reinterpret the rules in a way that would allow them to keep their monopolies.  They were mostly disappointed with the decision (hence the ruckus), although they did get regulatory relief for broadband expansions because the FCC found that there is now sufficient competition from cable companies to keep broadband pricing in check.