Competition Policy in the Post-Equal Access Market
John Haring and Evan Kwerel.
OSP Working Paper 22 (Feb 1987) considers whether the two conditions that the U.S. Department of Justice and District Court Judge Harold Greene deemed necessary to prevent AT&T from exercising monopoly power -- and that were embodied in the Modified Final Judgment (MJF) in United States vs. AT&T -- have now been substantially achieved. It argues that they have been.
With respect to the first condition, the authors observe that AT&T has been divested of the Bell Operating Companies (BOCs). It thus no longer has the opportunity to provide discriminatory interconnection to competitors or the ability to subsidize the prices of its interexchange services with revenue from local exchange services or to shift costs from competitive interexchange services to local exchange services.
With respect to the second condition, the authors argue that the BOCs are offering their customers equal access to all long-distance companies to the extent required by the MFJ. They therefore conclude that achievement of the relief sought by the government in United States vs. AT&T provides a logical and compelling basis for now undertaking revisions in the way in which the FCC regulates AT&T.