Kraemer & May: Consumers Will Benefit From Increased Choices
WASHINGTON, D.C. - A study by two telecommunications experts concludes that local telephone competition in Maryland is significant and widespread, and that there are no barriers preventing competitors from entering the market. Furthermore, the study, “Local Exchange Competition: Progress in Maryland,” predicts consumers will reap even greater benefits as competition intensifies and companies rush to offer additional products and services made possible by new technology. Both experts warn that certain types of regulation could be unnecessary or counterproductive.
“Competition exists in Maryland, and there appear to be no barriers to entry,” Joseph S. Kraemer and Randolph J. May conclude. The 1996 Telecommunications Act “created a mass market for competitive local exchange services.” As the result, 136 facilities-based and 50 local resale competitors had been authorized to provide service as of January 2002, competition has become “geographically dispersed,” and companies “will face more effective competition as CLECs consolidate into larger, better-financed and more effectively managed companies.” Finally, they say “wireline service will come under increasing competition from non-traditional sources, such as wireless substitution and Internet-based services.”
Kraemer, who is a director at the Law and Economic Consulting Group (LECG) and a PFF senior fellow, and May, who is a PFF senior fellow and director of communications policy studies, say competition makes such traditional regulations as rate setting and separate subsidiaries “less necessary,” and such new regulations as structural separation “entirely counterproductive.”
Philip M. Burgess, president of the Annapolis Institute and a PFF board member agrees with the study’s findings. “Maryland’s telecom market is increasingly competitive and dynamic,” he said. “When you allow people and companies to compete, consumers benefit from better products and prices.” Christopher B. Summers, president of the Maryland Public Policy Institute, expressed similar sentiments. “The Telecommunications Act has allowed the market to work, and consumers are the beneficiaries,” he said.
The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.