Problems of Regulating Specialized Telecommunications Common Carriers,
Abstract
In contrast to the traditional view of the telephone industry as a natural monopoly to the regulated along classical public utility lines, the FCC's MCI decision in 1969, its Specialized Common Carrier decision in 1971, and its 'open skies' policy announced in 1972 with respect to satellites, have permitted entry of new carriers competing with the Bell System, Western Union, and among themselves. The purpose of this paper is to discuss (a) issues relating to the potential impact of competition, (b) the problems posed for regulation, and (c) prospects for the future of specialized carriers. Three major issues emerge with respect to the introduction of competition: (1) Effects on the distribution of costs and benefits among users, especially between business and residential. (2) Effects on the efficiency with which facilities are built and operated, involving questions of whether undue duplication would arise, depending in part on the degree of economies of scale relative to traffic loads. (3) Effects on innovation, leading to reductions in costs for existing services and to introduction of new ones.
Document Details
- Document Type
- Technical Report
- Publication Date
- May 01, 1976
- Accession Number
- ADA032243
Entities
People
- Leland L. Johnson
Organizations
- RAND Corporation