Abstract

http://ssrn.com/abstract=1260393
 
 

Citations (1)



 
 

Footnotes (59)



 


 



The CLEC Experiment: Anatomy of a Meltdown


Larry F. Darby


The American Consumer Institute

Jeffrey A. Eisenach


American Enterprise Institute

Joseph S. Kraemer


affiliation not provided to SSRN

September 2002

Progress & Freedom Foundation Progress on Point Paper, Vol. 9., No. 23, September 2002

Abstract:     
In this paper, we report on our analysis of data from the SEC reports of 24 publicly traded competitive local exchange carriers (CLECs) for the years 1996-2001. Our focus is on the sources and uses of cash. Cash was raised mainly by issuing common and preferred stock and by borrowing. Collectively, the firms in our sample raised $43 billion during the five years following the Telecommunications Act. Only one of the 24 turned a profit, and all but seven have either declared bankruptcy or been acquired (generally at a steep discount) by other firms. In these respects, our sample is, unfortunately, quite representative of the "meltdown" of the CLEC sector as a whole.

Our purpose in undertaking this analysis is to contribute to a better understanding of "what went wrong" with the CLECs. Such an understanding is important for two reasons. Our analysis tends to support theories of the CLEC meltdown associated with the failures of managers and investors to make wise choices about operations of their firms and the allocation of their investments. While we find little if any support for the notion that more aggressive regulation could have "saved" the CLECs, we do find some indication that firms and investors may have been influenced in their behavior by excessive reliance on regulatory incentives.

Number of Pages in PDF File: 27

Accepted Paper Series





Download This Paper

Date posted: August 30, 2008  

Suggested Citation

Darby, Larry F. and Eisenach, Jeffrey A. and Kraemer, Joseph S., The CLEC Experiment: Anatomy of a Meltdown (September 2002). Progress & Freedom Foundation Progress on Point Paper, Vol. 9., No. 23, September 2002. Available at SSRN: http://ssrn.com/abstract=1260393

Contact Information

Larry F. Darby
The American Consumer Institute ( email )
1701 Pennsylvania Ave., NW, Suite 300
Washington, DC 20006
United States
Jeffrey A. Eisenach (Contact Author)
American Enterprise Institute ( email )
1150 17th Street, N.W.
Washington, DC 20036
United States
Joseph S. Kraemer
affiliation not provided to SSRN
Feedback to SSRN


Paper statistics
Abstract Views: 525
Downloads: 62
Download Rank: 217,007
Citations:  1
Footnotes:  59

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.406 seconds