Assessing the Effectiveness of Section 271 of the Telecommunications Act of 1996

Title: Assessing the Effectiveness of Section 271 of the Telecommunications Act of 1996

Research Question: How effective is Section 271 of the Telecommunications Act of 1996 in promoting competition in the local and long-distance telephone markets?

Methodology: The researchers analyzed the structure of sections 271 and 251 of the Telecommunications Act of 1996, and reviewed the interrelation of section 271 and the market-opening provisions of section 251. They examined the economic, institutional, and legal environment in which regulators operate and discussed whether section 271 is likely to be an effective means of opening local telecommunications markets to competition. They also provided a statistical assessment of the development of local competition across the country using available data.

Results: The study found that Section 271 is a reasonably effective incentive mechanism for opening the local exchange market to competition. It concluded that linking BOC entry into the long-distance market to local market access obligations is beneficial for promoting competition. The researchers also found that the use of entry into the long-distance market as a prize for the BOCs would benefit the long-distance market by adding an additional competitor only when that competitor's ability to vertically leverage its market power has been significantly reduced.

Implications: The study suggests that Section 271 of the Telecommunications Act of 1996 has been effective in promoting competition in the local and long-distance telephone markets. It supports the idea that linking BOC entry into the long-distance market to local market access obligations is a beneficial strategy for promoting competition. The study also highlights the importance of considering the economic, institutional, and legal environment in which regulators operate when designing policies to promote competition.

Link to Article: https://arxiv.org/abs/0109095v2 Authors: arXiv ID: 0109095v2