To read the full version of this content please select one of the options below:

Special access service and its regulation in the United States

Noel D. Uri (Senior Industry Economist in the Industry Analysis Division, Media Bureau, Federal Communications Commission, Washington, DC, USA)
Paul R. Zimmerman (Industry Economist in the Industry Analysis and Technology Division, Wireline Competition Bureau, Federal Communications Commission, Washington, DC, USA)

info

ISSN: 1463-6697

Article publication date: 1 April 2004

Abstract

In 1999 the Federal Communications Commission adopted an order granting complete deregulation of the rates for special access service for specific metropolitan statistical areas based on an objective showing that there was potential competition in that market. This was done in an environment where the local exchange carriers (LECs) subject to price caps were earning a rate of return in excess of 22 percent, with the rate of return on an upward trend. By 2002, the average rate of return across all price cap LECs topped 35 percent. The question that is investigated in this paper is whether the price cap LECs have market power in supplying special access service and whether they have taken advantage of this. The data clearly show that this is the case. Given the prevailing situation, there is a clear need to revisit the pricing flexibility order. First, the product market for special access service needs to be more carefully examined. Second, the metrics used to define the potential for competition need to be revamped.

Keywords

Citation

Uri, N.D. and Zimmerman, P.R. (2004), "Special access service and its regulation in the United States", info, Vol. 6 No. 2, pp. 122-160. https://doi.org/10.1108/14636690410542126

Publisher

:

Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited