The benefits of releasing the bell companies from the interexchange restrictions

Abstract

AbstractWe foresee substantial benefits to consumers if the regional telephone companies arereleased from the Modified Final Judgement's interexchange services restrictions. Smaller interexchange service customers, largely neglected because of the inadequate competitiveness of the incumbent interexchange carriers, would receive much of these benefits. Since divestiture, state and federal regulatoy agencies have developed a robust set of regulatory safeguards, which would prevent regional telephone companies' anticompetitive actions in the interexchange market. If, instead of theorizing about possibilities, one looks at the actual experience in unregulated post‐divestihue regional telephone company markets, one finds no signs of anticompetitive telephone company behavior. The regional telephone companies' access services are experiencing substantial competition. Given those facts, we do not believe that it matters to the health of interexchange competition whether competitors are attacking other regional telephone companies' services. Still, their other services arc being attacked, and this will limit any residual ability of the regional telephone companies to subsidize their interexchange operations by shifting costs to regulated ratepayers. In short, we see substantial benefits and low risks in allowing the regional telephone companies to enter the regional interexchange services market.