A Market-Oriented Analysis of the 'Terminating Access Monopoly' Concept
14 Colo. Tech. L.J. 21 (2015)
17 Pages Posted: 4 Dec 2015 Last revised: 5 Jan 2016
Date Written: 2015
Policymakers have long invoked the concept of a “terminating access monopoly” to inform communications policy. Roughly speaking, the concept holds that a consumer-facing network provider, no matter how small or how subject to retail competition, generally possesses monopoly power vis-à-vis third-party senders of communications traffic to its customers. Regulators and advocates have routinely cited that concern to justify regulatory intervention in a variety of contexts where the regulated party may or may not have possessed market power in any relevant retail market.
Despite the centrality of the terminating access monopoly to modern communications policy, there is surprisingly little academic literature on that concept as it applies to current regulatory debates. This paper seeks to fill that gap by exploring the various settings in which the concept does, or does not, help explain market dynamics in the communications sector. We conclude that the terminating access monopoly phenomenon, strictly understood, does not itself generally threaten market failures except in very limited circumstances. As the paper explains, the phenomenon could threaten inefficient outcomes only where, because of the underlying market context, the interconnecting provider or its customer has a particularized need to reach the customer set of the terminating access provider, and even then, market forces might correct any problem without regulatory intervention.
Keywords: telecommunications law, telecommunications policy, terminating access monopoly, terminating monopoly, gatekeeper, interconnection, intercarrier compensation
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