New policies are needed for the U.S. telecommunications industry. The continuation of current policies--which emphasize customer and convenience services to the near exclusion of developing domestically produced equipment and improving infrastructure--will constrain the domestic growth of U.S. corporations and make it difficult for smaller American firms to use sophisticated equipment and services. A new policy regime should focus on linkages between network infrastructure development and technological innovations in equipment, fostering the joint development of both. International competitors such as Japan and the European Community have already established policies to upgrade the existing telecommunications infrastructure and lead in the development of strategic technologies such as high definition television (HDTV). These competitors are also rapidly organizing an Integrated Services Digital Network to be a cornerstone for the development of future high technology industries. The United States needs a comprehensive and coherent approach to the industrial issues and regulatory concerns facing its telecommunications industry. One immediate step should be to establish an independent Department of Communications that would create a unified approach to the nation's economic base in the next decades. (31 references) (GL)