Competition and cross-subsidization in the telephone industry
The purposes of this study are (1) to show why the Federal Communications Commission has permitted progressively greater competition in interstate telephone services, (2) to assess the Commission's ability to handle problems of cross-subsidization that have arisen from competition, by drawing from the history of its major rate investigations, (3) to trace the policy implications of this experience for the continued rate regulation of interstate telephone service, and (4) to examine the conflict between economic efficiency and the desire to maintain low local telephone rates--a conflict exacerbated by the fact that competition makes less sustainable the subsidization of local service by interstate services.
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O COMPETITION IN PRIVATELINE SERVICES
COMPETITION IN MTS AND WATS MARKETS
CROSSSUBSIDIZATION AND LOCAL TELEPHONE
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access charges access rates allocated AT&T average basic Bell System bypass technologies Cincinnati Bell Commission Commission's decision common carriers common costs competing competitive entry competitive services competitors continue costs and revenues courage competition cover cross-subsidization demand deregulation distributional equity divestiture economic efficiency entrants expand facilities FCC 2d Food Stamp program heavy users increase interexchange interstate contributions interstate markets interstate services intrastate toll low-income groups LRIC maintaining low marginal cost market power MCI's microwave Moreover MTS and WATS nationwide network externalities nomic non-traffic sensitive costs number of subscribers offered operating companies percent predatory pricing private line private-line service problem rate of return reduce regulatory residential access residential subscribers satellite scribers SLU factor subscriber line costs subsidy switched services target tariff taxpayers tele Telecommunications telephone companies telephone rates telephone service Telpak terminal equipment tion traffic transmission uneconomic Universal Service Fund users of interstate Western Union