The Telecommunications Act at three years: an economic evaluation of its implementation by the Federal Communications Commission

Kahn, Alfred E.; Tardiff, Timothy J.; Weisman, Dennis L.

doi:10.1016/s0167-6245(99)00025-6

Cited by 70 publications

(23 citation statements)

References 16 publications

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“…However, Graham Guthrie, John Small and Julian Wright (2000) show for the downward-drifting asset prices relevant for telecommunications that historic cost valuation could have its merits. Depreciation is tricky, because prices are explicitly based on costs, while economic depreciation would depend on the future returns of the asset and therefore on the resulting prices (Michael Salinger 1998 Weisman 1999). Thus, the efficient firm standard would not allow the most efficient (among imperfect firms) to provide the service, whereas the use of the regulated firm's actual costs would make the entrant bypass the incumbent's facilities whenever the incumbent is less efficient.…”

Section: Cost Measurementmentioning

confidence: 99%

Price Regulation of Access to Telecommunications Networks

Vogelsang¹

2003

Journal of Economic Literature

117

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Without access of networks to each other, competition in the telecommunications sector would hardly have spread so quickly. Such mutual access is necessary for carriers to provide ubiquitous service and enable end-users to call and be called by anybody without subscribing to a system-wide monopolist. One-way access concerns bottleneck inputs provided by an incumbent network to entrants, while two-way access concerns the interconnection between networks. Whereas one-way access regulation is exclusively driven by containment of market power, two-way access is additionally affected by collusion possibilities. Among the numerous pricing rules discussed, none clearly dominates. This article provides a roadmap vis-a-vis the competing policy objectives for access price regulation.

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Section: Cost Measurementmentioning

confidence: 99%

Price Regulation of Access to Telecommunications Networks

Vogelsang¹

2003

Journal of Economic Literature

117

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“…It overstrains the essential facilities doctrine and is likely to destroy the incumbent's incentives to invest in its local networks. The more comprehensive the duty to share its local loops (at cost-based prices), the less is the incentive of the incumbent firm to invest in new, risky technologies: The regulated firm has to bear the whole risk of failure, but has to share the fruits of the investment if it turned out to be successful (see Kahn et al (1999), 346f).…”

Section: Suggestions For the Design Of An Unbundling Obligationmentioning

confidence: 99%

Regulating European telecommunications markets: unbundled access to the local loop outside urban areas

Gabelmann¹

2001

Telecommunications Policy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in

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“…9 It also opens the door to endless speculation as to how (in)efficient the incumbent provider might be (Tardiff, 2002;Kahn, Tardiff and Weisman, 1999). In other words, regulators determine what the efficient costs are for the ILEC without recognition of their existing network technologies and topologies as if they were writing on a "blank slate" (Kahn, 1998: 89-96).…”

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confidence: 99%

“…This is noteworthy given the range of cost estimates that have been filed in regulatory proceedings (Tardiff, 2002;Kahn, Tardiff and Weisman, 1999). It follows that if the ILECs do not have an incentive to misreport their costs, the great disparity between the ILECs' estimates of forward-looking costs and those proffered by the CLECs must be explained by the efficient-firm cost standard.…”

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confidence: 99%

Did The High Court Reach An Economic Low In Verizon v. FCC?

Weisman¹

2002

Review of Network Economics

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The Supreme Court's decision in Verizon v. FCC rests on two errant interpretations of the 1996 Telecommunications Act: First, the Act represents a new form of regulation rather than a deregulatory statute; Second, Congress intended that the playing field be tilted in favor of new entrants. Under the Chevron Doctrine, deference is given to the controlling federal agency if there is a "rational connection" between the regulations and statutory intent. The Court ruled that the FCC's implementation of the Act survives that scrutiny. This discussion contests that finding and argues that the FCC's regulations undermine the goals of the Act. IntroductionOn May 13, 2002, the U.S. Supreme Court issued its long-awaited decision in Verizon et al v. FCC et al ("Verizon v. FCC"). The Court focused on three primary issues: (1) The FCC's pricing rules for unbundled network elements; (2) Whether the exclusion of historical costs in the pricing rules constitutes a governmental taking; and (3) Various rules for combining network elements. This discussion is focused primarily on the economic implications of the FCC's costing standards -which the Court upheld -and secondarily on the takings claim -which the Court ruled was not yet "ripe". The Court's decision in Verizon v. FCC has been widely regarded as a stunning victory for the competitive local exchange carriers (CLECs) and a stinging defeat for the incumbent local exchange carriers (ILECs). The real loss with this decision, however, is likely to be the one borne by consumers. Indeed, the Court's decision in Verizon v. FCC set a troubling precedent -one that is destined to frustrate the goals of the 1996 Telecommunications Act ("the Act") and injure the competitive process in ways that we have yet to fully comprehend. * Mailing address: Department of Economics, Waters Hall, Kansas State University, Manhattan KS, 66506-4001 U.S.A. E-mail: weisman@ksu.edu. The author is grateful to Dale Lehman and Timothy Tardiff for thought-provoking discussions and helpful comments. A special debt of gratitude is due Fred Kahn for illuminating discussions and constructive commentary on an earlier draft of this manuscript. The usual caveat applies. The author presented expert testimony in state arbitration cases on behalf of one of the Bell Companies concerning some of the issues discussed herein.

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The Telecommunications Act at three years: an economic evaluation of its implementation by the Federal Communications Commission

Cited by 70 publications

References 16 publications

Price Regulation of Access to Telecommunications Networks

Price Regulation of Access to Telecommunications Networks

Regulating European telecommunications markets: unbundled access to the local loop outside urban areas

Did The High Court Reach An Economic Low In Verizon v. FCC?

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