Competition in Networking: Research Results and Implications for Further Reform

Abstract

In this paper I examine policies for opening US markets for local telecommunications to competition and draw implications for the future. I find that studies of competition in US telecommunications markets show a need for pricing flexibility for leasing incumbent facilities and reciprocal compensation, lifting Bell Operating Company long distance restrictions, and relaxing rules on mergers and divestitures. More research is needed on these issues, but waiting for more complete information before moving forward on policies would seem to be a poor choice. The benefits of moving forward with greater price flexibility on UNEs and reciprocal compensation, lifting long distance restrictions, and eased merger restrictions seem to be worth risk of making missteps because of incomplete information.