Negotiating for Improved Interconnection: The Incentives to Bargain

摘要

The report outlines regulatory policy recommendations for a smooth transition to a multi-vendor unregulated telecommunications marketplace. In developing policy recommendations, the study analyzes, within a structured framework, a telephone company's motivations for offering its customers and competitors improved local-loop access arrangements. Four major factors determining the company's incentives are identified and explored. The analysis is based on established economic and engineering principles and the FCC's experience with the issues involved in negotiations. In formulating the policy, a range of structural arrangements for the telephone companies were considered. For transition to an unregulated multi-vendor environment, negotiations are superior to existing tariffing mechanisms in allocating scarce telephone network resources associated with interconnection quality.