Regional Bell Operating Company entry into long‐distance and non‐price discrimination against rival interexchange carriers: empirical evidence from panel data

Abstract

AbstractThe incentive of the Regional Bell Operating Companies (RBOCs) to degrade the quality of interstate access services, an essential input provided to rival long‐distance carriers, once they begin offering long‐distance services has been a controversial issue in the academic literature. Using a panel of state‐level data over the years 1996–2001, this paper investigates whether the RBOCs engage in such ‘non‐price discrimination’ upon entering the long‐distance market. The results suggest the RBOCs improve the quality of some of their interstate access service offerings before entering the interexchange market, but begin degrading the quality of these services immediately afterward. Copyright © 2003 John Wiley & Sons, Ltd.