Telephone Carriers Research Articles

Portrait of a DG-Dominated World in Electricity Infrastructure [Viewpoint

For over a century, utilities have supplied electricity to power-hungry world economies. This supply in the western hemisphere has come mostly from large utility companies, whose rates were set in a regulatory environment to match their costs plus a fair return on invested capital. This massive and critically important infrastructure, which has been called the greatest government-sanctioned monopoly, has been slowly but surely opened to competition by distributed generation (DG) resulting from the restructuring of the electricity market. This restructuring has given consumers the discretion to choose electricity providers in much the same way they choose telephone carriers. The shift from centralized to distributed systems was generally recognized as the introduction to independent power producers and the beginning of competitive electricity markets, which allowed distributed units to partake in electricity delivery. The advent of renewable energy promoted the use of distributed systems and DGs. In this DG environment, the traditional electricity industry is undergoing a major change in the way it delivers electricity to millions of households and businesses.

The Effect of Regulation on Broadband Markets: Evaluating the Empirical Evidence in the FCC's 2015 'Open Internet' Order

In 2015, the Federal Communications Commission imposed common carriage regulation on broadband Internet service providers (ISPs) under Title II of the 1934 Communications Act. The action reversed what the FCC had, by 1999, called a “thirty-year tradition of ‘unregulating’ the data services market.” The premise for the regime shift included the FCC’s arguments that previous common carrier rules imposed by regulators had yielded economic gains. The Commission specifically noted market responses to (a) 2010 “net neutrality” rules (overturned by a federal court in 2014), (b) mobile licenses (AWS-3) auctioned by the FCC in January 2015, when Title II regulations were about to be imposed; (c) Title II regulation of mobile phones from 1994 to 2009; and (d) Title II rules applied to telephone carriers offering DSL services until 2005. Though the Court of Appeals for the D.C. Circuit recently upheld the Commission’s rules, it did so over Judge Williams’ well-reasoned dissent. Judge Williams was particularly critical of the FCC’s disregard for economic evidence. He strongly disagreed with the FCC’s conclusion that, “[a]s a factual matter, the regulatory status of broadband internet access service appears to have, at most, an indirect effect (along with many other factors) on investment. Specifically, he characterized support for the Commission's conclusion as “weak” and “superficial”. This debate is far from settled, as industry participants will likely petition the Supreme Court for certiorari and lobby for legislative reform. This paper subjects the FCC’s data and interpretation to critical scrutiny and finds Judge Williams’ criticism warranted: Making adjustments for inflation or general economic trends eliminates the positive output effects asserted by the FCC. Moreover, contrary to the Commission’s assessment of the empirical evidence, mobile services and broadband markets have shown notable growth in response to deregulatory events reducing Title II requirements.

On the Road to More Efficient Pricing of Telecommunications Services: A Look at the Evidence

Communications Commission (“FCC”) in its CALLS Order in 2000, which reduced usage based access rates and raised caps on the Subscriber Line Charge (“SLC”), a fixed, monthly fee paid by local phone company subscribers for basic connections. At present, the Commission is evaluating additional reform of this type labeled the “America’s Broadband Connectivity Plan” (the “ABC Plan”), which proposes, among other things, to cut per minute access rates to near zero ($0.0007 per minute) and raise the cap on the SLC over five-years, satisfying the National Broadband Plan’s recommendation for “long-term intercarrier compensation (ICC) reform that creates a glide path to eliminate per-minute charges while providing carriers an opportunity for adequate cost recovery.” Given the movement to more efficient pricing over the past 30 years, it should be possible to evaluate the effect on consumers from such changes by looking at historical data. I do so here. Using data collected by the FCC, I study access revenues received by large, traditional telephone carriers over the period 1990 through 2007. My analysis suggests that the migration to more efficient pricing has substantially benefited consumers – the average local phone consumer pays $8 less in interstate monthly access charges today, when pricing is more efficient, than in the past when the pricing system was riddled with cross-subsidies. Moreover, for the average phone company customer, the data indicate that for every $1 reduction in carrier revenues from usage fees, revenues from SLCs increase only $0.40. Thus, the expected elimination of $2 in monthly per line usage-based access revenues is expected to increase SLC revenues only by about $0.80 on a per-line, per-month basis, well below the proposed cap increase of $3.75 per line month.

Market Power in US Broadband Services

The US residential broadband market is commonly characterized as a duopoly consisting of telephone carriers (digital subscriber lines) and cable TV operators (cable modems). The implication is drawn that market power obtains; this, in turn, drives recommendations for new competition policy remedies. Yet, market power cannot be directly deduced from market shares or price-cost margins. We develop an economic analysis that examines both static and dynamic factors in considering market power, finding that fixed broadband providers do not appear to generate supra-competitive returns. Public policies to regulate broadband providers should be informed by these marketplace conditions.

Market Power in U.S. Broadband Services

The U.S. telecommunications industry has come under scrutiny amid concerns that regulatory policies have been too permissive. These concerns are perhaps most prominent in the residential broadband market where there is a perception that the “duopoly” between telephone carriers (DSL suppliers) and cable TV operators (cable modem services) has given rise to anti-competitive behavior. The presence of market power is a testable hypothesis that cannot be deduced solely from market shares or price-cost margins. We develop an economic analysis that incorporates both static and dynamic factors to examine the extant marketplace evidence. The data suggest that “duopoly” broadband providers do not generate supra-competitive returns. Public policies to regulate broadband providers should be informed by these market conditions.

Hold the Phone: Assessing the Rights of Wireless Handset Owners and Carriers

Wireless operators in most nations qualify for streamlined regulation when providing telecommunications services and even less government oversight when providing information services, entertainment and electronic publishing. In the United States, Congressional legislation, real or perceived competition and regulator discomfort with ventures that provide both regulated and largely unregulated services contribute to the view that the Federal Communications Commission (FCC) has no significant regulatory mandate to safeguard the public interest. Such a hands off approach made sense when cellular telephone carriers primarily offered voice and text messaging services in a marketplace with six or more facilities-based competitors in most metropolitan areas. However the wireless industry has become significantly more concentrated even as wireless networking increasingly serves as a key medium for accessing a broad array of information, communications and entertainment (ICE) services. As wireless ventures plan and install next generation networks (NGNs), these carriers expect to offer a diverse array of ICE services, including Internet access, free from common carrier regulatory responsibilities that still apply to telecommunications services. Wireless carrier managers reject the need for governments to ensure consumers safeguards such as nondiscriminatory access and separating the sale of radiotelephone handsets from carrier services. Critics of wireless regulation claim that government-imposed obligations would create disincentives for NGN investment and have no place in a competitive marketplace.This article will examine the costs and benefits of government-imposed rules that would require wireless carriers to separate sales of handsets from service subscriptions and to comply with network neutrality rules designed to ensure nondiscriminatory access to content. The article will assess the rights of both wireless subscribers and carriers to control how handsets attach to networks and what services the handsets can access. The article will consider whether wireless network access should parallel long established rules for wired networks and will compare wireless network neutrality issues with a preexisting debate about neutral Internet access via wired networks. For example, wireless network neutrality includes consideration of separating Internet access equipment from Internet services, an unbundling principle established for wired networks decades ago. Because wireless carriers package subsidized handset sales often with a blend of ICE services and consumers welcome the opportunity to use and replace increasingly sophisticated handsets, regulators have refrained from ordering handset unbundling. But for other services, such as cable television, the FCC has pursued public safeguards that attempt to allow consumers the opportunity to access only desired content using least cost equipment options. The article also examines why wireless carriers could avoid becoming involved in a network neutrality debate for several years, despite the fact that their common carrier status, vis a vis voice services, provides a statutorily supported basis for imposing nondiscrimination responsibilities. The article concludes that the rising importance of wireless networking for most ICE services and growing consumer disenchantment with carrier-imposed restrictions on handset versatility and wireless network access will trigger closer regulatory scrutiny of the public interest benefits accruing from wireless network neutrality.

The mechanics of lawful interception

Phone tapping was one issue at the top of the headlines last year, after the NSA was discovered listening in to US citizens' conversations. But the issue of lawful intercept stretches back for years. During the mid-nineties, legislation was signed in the US that outlined a more structured framework for telephone carriers' compliance with law enforcement requests, and created standards for the exchange of such information. Now, thanks to the rise of VoIP, P2P and other forms of communication, the law is being updated. And Europe has also been working to put its own legislation in place governing the retention of such information. Stephen Gleave, VP of marketing at SS8 Networks, explains how the legal requirements surrounding lawful interception have evolved over the years, and describes where we're headed. For years, communication service providers (CSPs) wanting an operating licence have had to meet set conditions. One such condition is that they must work with law enforcement to gather intelligence which may be used as evidence in the prosecution of criminals. Governments around the world have passed legislation that mandates this co-operation and have continually strived to update these statutes as technology advances and criminal communications become more sophisticated.

Phone Companies Get into the TV Business

Competition in the telecommunications industry has become fierce in the past few years, and phone companies have increasingly found themselves on the losing end. Competition from wireline, cellular, and voice over IP (VoIP) services, including those from cable TV companies, has reduced telephone carriers' customer bases, prices, and profit margins. To accomplish their goals, phone carriers are trying to provide the "triple play" of voice, video, and data services, which cable TV companies already offer. IPTV uses IP networks to deliver TV programming from a central location to a base of multiple subscribers. In addition to software that provides basic functionality, IPTV systems run middleware and both back-office and digital rights management (DRM) software

Internet Phones Save Money, Extend Your Connectivity

Internet Phones Save Money, Extend Your Connectivity

I want my IPTV: Internet Protocol television predicted a winner

Among the technology winners IEEE Spectrum magazine recently predicted to surge in 2005 is Internet Protocol television. IPTV delivers a relatively low-speed broadband TV connection (2.2 megabits per second) through telephone wires. By using a legacy copper network instead of a more costly optical-fiber upgrade, IPTV delivers a multiplicity of programming choices that's expected to enable telephone carriers to one day give cable providers a run for their money.

The battle for broadband [Internet protocol television

This paper discusses the role of Swiss telephone carriers and cable providers in the highly competitive telecommunications market. A key technological development is the software platform called Internet Protocol television (IPTV). At the forefront is the Bern-based Swiss phone company, Swisscom AG. Swisscom has conducted tests to determine its ability to deliver video and win customers from cable using IPTV technology. Results of the tests will significantly alter the future direction of the telecommunication industry, and that of a big chunk of the entertainment world as well.

The battle for broadband [Internet protocol television

This paper discusses the role of Swiss telephone carriers and cable providers in the highly competitive telecommunications market. A key technological development is the software platform called Internet Protocol television (IPTV). At the forefront is the Bern-based Swiss phone company, Swisscom AG. Swisscom has conducted tests to determine its ability to deliver video and win customers from cable using IPTV technology. Results of the tests will significantly alter the future direction of the telecommunication industry, and that of a big chunk of the entertainment world as well.

Entry Policy in Local Telecommunications: Iowa Utilities and Verizon

This paper offers legal and economic analysis of two recent Supreme Court decisions, AT&T Corporation v. Iowa Utilities Board and Verizon Communications v. FCC. The paper is written with two audiences in mind. For those unfamiliar with the cases, we offer what we hope is an accessible yet detailed account of the underlying policy issues raised by a legal regime that requires incumbent local telephone carriers to lease parts of their telephone networks to would-be rivals. To that end, we discuss the main reasons why sharing rules are sometimes imposed in markets like the market for local telephone service, and we then link those issues to the specific legal questions at issue in these cases. For those already well versed in those issues, by contrast, we have woven into our account a variety of new ideas about both the relevant legal analysis and the underlying economics. We explain, for example, how low access prices might encourage incumbents to invest in new infrastructure despite the intuitive argument to the contrary, and how the Commission's seemingly nonsensical pick-and-choose rule can actually accomplish important policy goals, working in essence as a statutory most-favored-nation clause. In the end, then, we hope this paper will have value both for those relatively well steeped in telecommunications policy and for those just beginning to learn these issues.

Subscriptions for direct broadcast satellite and cable television in the US: an empirical analysis

We identify factors that affected DBS (direct broadcast satellite) penetration, relative to cable penetration, in the US subscription television market. We found that regulation of expanded-basic cable services, which expired in 1999, may have unintentionally enhanced DBS penetration in noncompetitive cable franchise areas as cable providers charged ‘high’ prices. On the other hand, head-to-head competition from cable overbuilders or local exchange telephone carriers adversely affected DBS penetration as cable rates were lowered. Lastly, cable system upgrades limited DBS penetration since cable providers were able to offer high-quality services that are comparable to satellite transmission, even though cable rates were higher.

Cost shifting in international telephone calls between US and African countries

This paper uses a two-equation model, panel data from African countries during the 1992–1996 period and a dynamic panel estimator to investigate cost shifting in international telephone calls between these African countries and the US. Using call minutes as the dependent variable, we find that callers in African countries engage in cost shifting while their US counterparts do not. We also find that while US callers reciprocate call minutes from African countries to the US, callers in Africa do not. Although, the price elasticities of demand are found to be inelastic, African demand elasticity is slightly higher partly due to cost shifting and call reciprocity effects. Our results are robust to different specifications of the model, including the sample size. The results have important policy implications for pricing by international telephone carriers and the US's current international settlement deficits with African countries.

Entry Policy in Local Telecommunications: Iowa Utilities and Verizon

The Telecommunications Act of 1996 requires, among other things, that incumbent local telephone carriers lease parts of their telephone networks to would-be rivals. 1 If you have children, you can easily imagine the difficulties inherent in this approach; mandated sharing is often contentious when forced upon young kids and is no easier as applied to firms with strong, contradictory interests. These problems are exacerbated in the telecommunications setting by imprecision in the rules of the game. As Justice Scalia put it AT&T Corp. v. Iowa Utilities Board, 2 “[i]t would be gross understatement to say that the Telecommunications Act of 1996 is not a model of clarity. It is in many important respects a model of ambiguity or indeed even self-contradiction.” 3 However complicated the legal provisions, the intuition behind them is straightforward: the purpose of mandatory sharing is to facilitate competition. Without mandatory sharing, a competitor can enter the market only if it can either cut a deal with an existing telephone company or build its own network from the ground up. With mandatory sharing, by contrast, a competitor has a third option: it can enter the

Is five too many? Simulation analysis of profitability and cost structure in the Korean mobile telephone industry

Four new nationwide entrants were introduced into the Korean mobile telephone industry provoking intense competition among the five carriers by late 1997. Some assert that there is excessive competition and industry restructuring is needed. In this paper, we analyze the profitability of mobile telephone carriers and the degree to which cost is reduced through M&A, thereby obtaining principal information on the economic incentives for industry restructuring.

Using wireless technology to provide basic telephone service in the developing world

Low-tier wireless systems offer great promise for the provision of basic telephone service in the developing world. Such systems offer the advantages of rapid deployment, minimal disruption during construction, and low cost. This paper examines the level of investment required to deploy such systems, exploring the question in the context of a number of design constraints and parameters. The analysis shows that the investment required to build a low-tier wireless system compares quite favorably with that of a conventional cable-based system. The paper concludes with some policy implications of the work that are relevant to national governments and telephone carriers in the developing world.

ISDN reaches the market

The integrated-services digital network, for 10 years seen only in limited installations, is branching out around the world. The author describes how telephone carriers are now starting to report a big boost in ISDN installations. He details how the surge is the result of an increasing appetite for bandwidth, a broadening suite of ISDN-enabled applications, wider availability of the network's services, and better prices for service and equipment.< <ETX xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">&gt;</ETX>

Editorial Rights of Telephone Carriers

An ongoing issue in communications policy concerns the proper role of the local telephone exchange carriers in the provision of con tent. Historically, these regulated monopolies acted solely as content-neutral common carriers. This status is undergoing a dramatic change, as the telecommunications system becomes a conduit for mass communication services and as local carriers begin to face competition. The removal of the information services ban by the federal district court in 1991 was only one action of many in the past decade applying First Amendment principles, especially the recognition of editorial rights, to the telephone carriers.