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Access Charge Reform And Implications for CLEC's

Product Type: Market Research Report
Published by: New Paradigm Resources Group
Published: June 1997
Product Code: R257-016
Description

Following upon its order regarding competition in the local exchange the Federal Communications Commission (“FCC”), adopted its eagerly awaited regulatory trilogy on May 7, 1997 through which it purports to further the transition to a competitive marketplace in the local loop. While each of these orders, Access Charge Reform, Universal Service Reform and Price Cap Performance Review have specific application to the post-divestiture system of cost allocations and separations, read together they attempt a unitary system of rationalizing the flow of costs and a reordering the payment of charges during the transition from a regulated to a competitive market. This month NPRG issues its first in a series of monthly analyses to reconstruct the effect of these three orders on the competitive marketplace generally and upon CLECs in particular. With this issue we examine the effect of the highlights of the Access Charge Reform plan on the CLEC industry.

In it we find the following:

  • Access Charge Reform is better for the CLECs than expected.
  • The equity markets have responded favorably to the FCC’s orders.
  • By diversifying their product mix away from heavy dependence upon access services relative to local service and data products, the CLECs have helped to insulate themselves from potential adverse reactions from precipitous regulatory action regarding access reform.

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