Article Abstract:
Several Modification of Final Judgment (MFJ) restrictions on the regional Bell operating companies (RBOCs) have already been rescinded except for the ones on long distance and equipment markets. Analysis of the long distance or interLATA (Local Access and Transport Areas) market show that it is not competitive. Such situation is not beneficial to the residential and small business users, who make up the largest section of users. The equipment market, though more competitive in comparison, is fast growing and have many new entrants, which would deter foreclosure by a single competitor. The removal of the MFJ restrictions on the RBOCS promote competition, economic efficiency as well as improve consumer welfare.
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Article Abstract:
Two developments in the local communications market have created great possibilities of new strong competitors for the regional Bell operating companies. One of these is the Federal Communications Commission (FCC) regulatory decisions that facilitate competitive entry or the application of new technologies to local communications market. Such technologies include linking fiber-optic networks with local exchange networks and wireless communication service options for local calls. The other development is the strategic expansion of AT&T, MCI and Time-Warner into the local market. The overall result of these development is a decline in the aggregate value of the RBOCs.
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Article Abstract:
The Modification of Final Judgment (MFJ) line-of-business restraints is supposed to be a deterrent to predation in the telecommunications industry. The regional Bell operating companies (RBOCs) have been banned from providing interLATA (Local Access and Transport Area) services and from manufacturing telecommunications equipment. The restrictions are supposed to prevent them from practicing predatory pricing. Studies have revealed that this is highly unlikely, assuming that price-caps or other incentive-based regulations would be implemented and equal access would be enforced.
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