Bringing Competition to Telecommunications by Divesting the RBOCs

Abstract

The road to competition in telecommunications has been a long one and, despite the major technological advances in microelectronics, wireless and optical fiber, the industry is only partially competitive. In this paper we argue that the main barriers to competition are the Regional Bell Operating Companies (RBOCs) as they control the bottleneck of access to the local wireline network. The Telecommunications Act of 1996 (the 96 Act) attempted to change this by allowing RBOCs into long-distance, provided they opened up their networks to competitors. This has proved to be very difficult to do because of the nature of the local networks and the problems of interconnections to them. These problems have meant that the competitors known as “Competitive Local Exchange Carriers” (CLECs) have not been able to compete on equal terms with the RBOCs. As the RBOCs were the gatekeepers, the CLECs were always concerned that absent regulation, the RBOCs would gouge them with high prices and that even with regulation the