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Price Gouging And Competition In The Special Access Market

  • The FCC should not acquiesce in the BOCs’ excessive pricing
  • Business Communications Review
  • 10/1/2007
  • Hank Levine, Jim Blaszak & Colleen Boothby

Economic regulation serves no good purpose in effectively competitive markets. But it can — and should — play an important role in markets that are not effectively competitive. Indeed, modern regulation was invented in the late 19th century to prevent railroads (and later, power and telephone companies) from price gouging in such markets. Where competition is seen as feasible but has not yet developed, regulation has been employed to stop those with market power from using it to retard or prevent the emergence of competitors. Telecom isn’t the only example of this, but it is one of the clearest.

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