Competition, cross-subsidies, and residential telephone access
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Competition, cross-subsidies, and residential telephone access by Leland L. Johnson

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Published by Rand Corp. in Santa Monica, Calif .
Written in English


  • Telephone -- United States -- Rates.

Book details:

Edition Notes

StatementLeland L. Johnson.
ContributionsRand Corporation.
The Physical Object
Pagination13 p. ;
Number of Pages13
ID Numbers
Open LibraryOL22395690M

Download Competition, cross-subsidies, and residential telephone access


Downloadable (with restrictions)! Recent regulatory and technological changes suggest that the local telecommunications market may soon present opportunities for profitable entry. Bypass activity by businesses, combined with the generally higher business rates, suggests that business-service revenues may be subsidizing residential access to the local network.   The United Kingdom has long recognised the need for an active competition policy. The roots of modern competition policy can be traced back to the formation of the Monopolies and Restrictive Practices Commission in , and the main features of current legislation and .   In virtually every country, the price of residential access to the telephone network is kept low and cross-subsidized by business services, long distance calling, and various other telephone services. This pricing practice is widely defended as necessary to promote "universal service," but Pages: tion because competition drives the above-cost rates toward cost, thereby depriving regulators of the sources of funds for such subsidies. The U.S. airline regulator, the Civil Aeronautics Board, began to purge the regu- lated rate structure of these cross-subsidies almost a decade before deregu- lation.

Once access reform has brought down access prices to cost, and competition in local service has been well established, universal service will be supported by a new fund to be created. In the implementation of the Act, local competition and access reform should be preconditions to establishing a new universal service fund for large ILECs. The Korean telecommunications industry In addition to this implementation problem, no carriers are expected to equate the prices of final product services to the corresponding costs since no fully competitive environment is established in the final product markets, even if they can purchase the intermediate input - the access service - at its by: 4. “Monthly residential revenue per residential customer is calculated as total residential video, Internet and voice annual revenue divided by twelve divided by average residential customer relationships during the respective year.” NOTE: Thus, there is an additional $$ a month that may also need to be eliminated. Charter never. As Congress correctly recognized, a precondition for competition was that prices reflect the actual costs of providing services, and thus that any cross-subsidies be made explicit. One phenomenon the Telecommunications Act could not and did not anticipate was the explosive growth of the Internet and its impact on the telecommunications network.

The Federal telecommunications excise tax (FET) adds three percent to the cost of every telecommunications bill. It covers both long distance and local telephone service for both residential and business customers. Revenues from the tax are treated as general revenues. The FET is projected to raise about $5 billion in FY Telephone Bills: Charges on Local Telephone Bills Telephone Companies According to estimates of the Federal Communications Commission (FCC), there are over 2, companies that provide some type of local telephone service and over 1, companies that provide some type of long-distance telephone service in 1 the United States. There may be almost that many ways of presenting a telephone bill. Read chapter Funding the National Information Infrastructure: Advertising, Subscription, and Usage Charges: This book contains a key component of the NII. Page of networks." A competitive market for local exchange services is essential to such efficient exploitation of all technologies. Moving from theoretical concepts to the practical reality of creating local exchange competition requires certainty and flexibility: certainty to inspire investor confidence, and flexibility to respond to constantly changing—and largely unknown—market.