FCC Needs to Improve on Dedicated Access Services

FCC NEEDS TO IMPROVE ITS ABILITY TO MONITOR AND DETERMINE THE EXTENT OF COMPETITION IN DEDICATED ACCESS SERVICES
[SOURCE: Government Accountability Office]
Government agencies and businesses that require significant capacity to meet voice and data needs depend on dedicated access services. This segment of the telecommunications market generated about $16 billion in revenues for the major incumbent telecommunications firms in 2005. The Federal Communications Commission has historically regulated dedicated access prices. With the Telecommunications Act of 1996, FCC reformed its rules to rely on competition to bring about cost-based pricing. Starting in 2001, FCC granted pricing flexibility on the basis of a proxy measure of competition. GAO examined 1) the extent that alternatives are available in areas where FCC granted pricing flexibility, 2) how prices have changed since the granting of pricing flexibility, and the effect on government agencies, and 3) how FCC monitors competition. GAO’s work included analyzing data on competitive alternatives, list prices, and average revenue, and interviewing FCC officials and industry representatives. GAO recommends that FCC better define effective competition, and consider additional data to measure and monitor competition. FCC disagreed that they need to better define competition and collect additional data. GAO maintains that additional data collection is necessary for FCC to better fulfill its regulatory responsibilities. (GAO-07-80)
http://www.gao.gov/cgi-bin/getrpt?GAO-07-80
Highlights - http://www.gao.gov/highlights/d0780high.pdf