Overview

The last 20 years have been a period of competitive and regulatory turmoil in telecommunications throughout the world. Nothing from local wireline voice telephony to international satellite data communications has been untouched. In the United States, divestiture and deregulation moved the telecommunications industry toward less concentrated market structures and more reliance on competition to determine prices and allocate resources. Many foreign governments privatized telecommunications and removed entry barriers that protected telecommunications monopolies. New technology and deregulation led to entry by new companies offering international telecommunications services and changed the way the traditional PTT/INTELSAT monopolies conduct their businesses.

Since the breakup of the Bell System, competition has increased for a variety of telephone services in the United States. Long-distance service has become less concentrated, and the regional Bell operating companies have begun to face some competition from competitive access providers, cable television companies, and interexchange carriers. Cellular telephony has become a major business, and entry by new mobile services using digital technologies has begun. These developments are being accelerated by the Telecommunications Act of 1996, which opened both local telephony and cable television distribution to competition, deregulated certain cable rates, and created new universal service goals and obligations. Further, the act specifies conditions under which the former Bell monopolies could enter equipment manufacturing and offer long distance service. These dramatic changes raise a host of policy questions that federal and state regulators must address.

Experience

EI economists have analyzed telecommunications issues while serving in the Federal Communications Commission, Department of Justice, Federal Trade Commission, and White House Office of Telecommunications Policy.

EI economists have served U.S. firms in industries such as local wireline telephone, cellular telephone, domestic and international long distance, satellite communications, cable television, directory publishing, and information services. EI economists have also consulted on telecommunications matters for international organizations, governments, and companies in Canada, Great Britain, Argentina, Mexico, Peru, Australia, and New Zealand.

EI experience includes the following:

• Testimony on market definition and market power regarding the break-up of the Bell system
• Affidavits filed in Federal Communications Commission proceedings on alleged market power, standards, and interconnection, unbundling, and resale obligations for cellular and other commercial mobile radio services
• Analysis relating to market definition and market power in a variety of telecommunications services, including domestic and international services provided by communications satellites, video programming and inside wiring services provided by telephone companies, and roaming services provided by cellular telephone companies
• Analysis and testimony before state commissions on access to local telephone networks and to telephone subscriber information, and on competition in intrastate long distance telephony and private pay phone services
• Study of the competitive consequences of entry by the regional Bell operating companies into electronic information services
• Analysis of the competitive effects of mergers and joint ventures involving the provision of global telecommunications network services, telecommunications equipment, communications satellites and international cable transmission services
• Damage studies in private Lanham Act deceptive advertising cases, Sherman Act monopolization suits, and contract disputes relating to local wireline, cellular, long-distance, video conferencing, and satellite communications, as well as telecommunications equipment
• Telephone rate cases and other regulatory proceedings relating to price caps, rate design, access charges, costs of service, advertising, and affiliated-company transactions
• Testimony assessing the cost justification for rates charged for telephone subscriber listings in overcharge complaints filed with the Federal Communications Commission