Entry Policy in Local Telecommunications: Iowa Utilities and Verizon

54 Pages Posted: 10 Jan 2003  

Douglas Lichtman

University of California, Los Angeles (UCLA) - School of Law

Randal C. Picker

University of Chicago - Law School

Date Written: January 2003

Abstract

This paper offers legal and economic analysis of two recent Supreme Court decisions, AT&T Corporation v. Iowa Utilities Board and Verizon Communications v. FCC. The paper is written with two audiences in mind. For those unfamiliar with the cases, we offer what we hope is an accessible yet detailed account of the underlying policy issues raised by a legal regime that requires incumbent local telephone carriers to lease parts of their telephone networks to would-be rivals. To that end, we discuss the main reasons why sharing rules are sometimes imposed in markets like the market for local telephone service, and we then link those issues to the specific legal questions at issue in these cases. For those already well versed in those issues, by contrast, we have woven into our account a variety of new ideas about both the relevant legal analysis and the underlying economics. We explain, for example, how low access prices might encourage incumbents to invest in new infrastructure despite the intuitive argument to the contrary, and how the Commission's seemingly nonsensical pick-and-choose rule can actually accomplish important policy goals, working in essence as a statutory most-favored-nation clause. In the end, then, we hope this paper will have value both for those relatively well steeped in telecommunications policy and for those just beginning to learn these issues.

Keywords: telecommunications, Verizon, Iowa Utilities, natural monopoly

Suggested Citation

Lichtman, Douglas and Picker, Randal C., Entry Policy in Local Telecommunications: Iowa Utilities and Verizon (January 2003). U Chicago Law & Economics, Olin Working Paper No. 178. Available at SSRN: https://ssrn.com/abstract=368040 or http://dx.doi.org/10.2139/ssrn.368040

Douglas Gary Lichtman (Contact Author)

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States
310-267-4617 (Phone)

Randal C. Picker

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States
773-702-0864 (Phone)

HOME PAGE: http://www.law.uchicago.edu/Picker/

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