The Telecommunications Act of 1996: The “Costs” of Managed Competition: The `Costs' of Managed CompetitionSpringer Science & Business Media, 2000 M09 30 - 128 páginas The Telecommunications Act of 1996 envisioned a competitive free-for-all in the U.S. telecommunications industry with removal of barriers to entry in local telecommunications markets and the lifting of the artificial restrictions that kept the Regional Bell Operating Companies (RBOCs) out of the interLATA long-distance market. After close to 5 years, only one RBOC has been granted permission (controversially) to enter the interLATA market, and local competition has yet to provide most consumers with meaningful choices. In addition, the wave of mergers across the industry has raised the specter of putting the former Bell System back together again. Policymakers now openly question whether the Act can deliver what it promised. Three principal themes are developed in this book. First, there has been a coordination failure between Congress and the FCC in translating the principles embodied in the Act into practice. The authors provide evidence for this by analyzing stock market reactions to legislative and regulatory actions. This coordination failure was largely predictable, given the ambiguity in the Act, as well as conflicting jurisdictions between the FCC and the states. Second, the Act calls for wholesale prices to be `based on cost.' Regulators adopted a costing standard (TELRIC) that provides a means to subsidize competitive entry in local telephone service markets. The ready adoption of the TELRIC standard by regulators is shown to be tied to the third theme: price cap regulation provides regulators with `insurance' against the adverse effects of competition in local telephone markets. Statistical analysis reveals that regulators in price cap states set uniformly lower unbundled network element prices (lower barriers to entry) in comparison with regulators in rate-of-return and earnings sharing states. The result is a triumph of regulatory processes over market processes - the antithesis of the purpose of the Act. |
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Contenido
Chapter 1 INTRODUCTION AND OVERVIEW | ix |
INDUSTRY TRENDS AND MARKET STRUCTURE | 7 |
22 CONGRESSIONAL EXPECTATIONS | 10 |
23 DEMAND SIDE CONSIDERATIONS | 12 |
24 PUBLIC POLICY ISSUES | 13 |
25 DOES SIZE MATTER? | 14 |
26 RBOC ENTRY INTO INTERLATA LONG DISTANCE | 14 |
27 THE FUTURE | 15 |
62 HISTORICAL NOTES | 56 |
63 EMBEDDED AND FORWARDLOOKING COSTS | 59 |
64 METHODOLOGY | 62 |
BASE CASE SCENARIO | 63 |
66 DECREASING INVESTMENT COSTS | 64 |
67 ASYMMETRIC DEPRECIATION PERIODS | 66 |
68 SIMULATION RESULTS | 68 |
69 EMPIRICAL ANALYSIS | 71 |
THE STOCK MARKET REACTS 31 INTRODUCTION | 17 |
32 STOCK PRICES | 18 |
33 EVENTS ANALYSIS | 22 |
ALTERNATIVE EVENTS ANALYSIS | 26 |
A JURISDICTIONAL MODEL 41 INTRODUCTION | 29 |
42 BENCHMARK RESULT | 30 |
43 THE MULTIPLE AGENT MODEL | 31 |
44 WHO SETS WHOLESALE PRICES? | 39 |
THE FCCS EFFICIENTFIRM STANDARD TELRIC 51 INTRODUCTION | 43 |
52 STATUTORY AND REGULATORY COSTING STANDARDS | 45 |
53 THE EFFICIENTFIRM VS THE PRICE CAP APPROACH | 46 |
54 STRATEGIC BEHAVIOR | 49 |
55 THE PARADOX OF DISPARATE COST STANDARDS | 52 |
56 CONCLUSIONS | 54 |
BACK TO THE FUTURE1 61 INTRODUCTION | 55 |
610 CONCLUSIONS | 73 |
ASSUMPTIONS USED IN THE SENSITIVITY ANALYSIS | 76 |
EXPLAINING STATE REGULATORY ACTIONS 71 INTRODUCTION | 79 |
72 PCR IN THEORY AND PRACTICE | 82 |
73 PRINCIPLES TO FOSTER REGULATORY COMMITMENT | 88 |
74 THE ECONOMIC AND LEGAL FOUNDATIONS OF A COMPLETE PRICE CAP | 90 |
75 POLICY IMPLICATIONS | 93 |
DATA USED IN THE REGRESSIONS | 94 |
ADDITIONAL EMPIRICAL RESULTS | 97 |
Chapter 8 CONCLUSIONS | 103 |
References | 109 |
Name Index | 117 |
119 | |
Otras ediciones - Ver todas
The Telecommunications Act of 1996: The “Costs” of Managed Competition Dale E. Lehman,Dennis Weisman Vista previa limitada - 2012 |
The Telecommunications Act of 1996: The “Costs” of Managed Competition Dale E. Lehman,Dennis Weisman Sin vista previa disponible - 2012 |
Términos y frases comunes
access charges actual costs Admissibility Test analysis arbitration assumed AT&T average Bell Atlantic capital costs ceteris paribus Chapter CLECs common costs competitive entry Congress cost of capital cost studies depreciation periods difference between embedded divestiture earnings sharing economies of scope efficient efficient-firm cost standard Eighth Circuit embedded and forward-looking embedded costs entrants event facilities-based FCC Order FCC proxies firm's forward-looking costs incentive regulation increase incumbent firm incumbent provider incumbent provider's input interLATA long distance investment costs IXCs jurisdictions long distance market long distance prices loop Mark Fowler merger methodology moral hazard network elements October 11 price cap plans price floor rates RBOC RBOC entry reduce regulated firm Regulatory Economics regulatory reform regulatory regime resale discounts residential retail prices set wholesale prices Sidak stock market Stylized Fact subsidize Supreme Court Telecommunications Act telecommunications industry telecommunications markets Telecommunications Reports telephone service unbundled universal service Weisman X-factor