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Master's Professional Reports Abstract

The Return of Ma Bell? An Exploration of the Natural Monopoly Inherent in the Local Exchange Market following the Telecommunications Act of 1996
Kelly Trish
REPORT 2000 T7385 Public Affairs Library

This paper argues that the local exchange market in telecommunications is a natural monopoly, and still has characteristics of a natural monopoly that must be carefully governed in order to protect the public interest by the FCC and state regulatory commissions if competition is ever to take root. It examines the historical development of telecommunications policy in the public interest, from the Communications Act of 1934 to the Modified Final Judgment of 1982 to the Telecommunications Act of 1996. It then analyzes Section 271 of the Telecommunications Act of 1996, which allows the Regional Bell Operating Companies ("RBOCs") to enter the long-distance market provided the local exchange market has been satisfactorily opened to competition. Finally, it compares the two most recent Section 271 applications and concludes that, based on the current trend toward consolidation in the telecommunications industry, and the amount of market power already retained by the RBOCs, competition will not last - and the natural monopoly will return - without significant policing by regulatory authorities.


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