Introduction
I appreciate the opportunity to speak here at the First National Symposium on Coupling Technology to National Need. The title of my remarks is "Engineering, Economic, and Policy Issues for Interexchange Carriers." Although I am an engineer by training, I have spent most of my professional life working in the area of public policy, especially as related to the role of competition in communications. Therefore, I will focus much of my attention on the policy aspects of interexchange carriage and on issues relating to the development of competition.
I should hasten to add that these views are my own and do not necessarily reflect those of any interexchange carrier for which our consulting firm may have done work or of The Annenberg Washington Program in Communications Policy Studies, with which I am affiliated.
By way of further introduction to my remarks, I should add that most of the interexchange carriers' policy concerns are associated with local exchange carriers and markets. This is because
- as a practical matter, the interexchange carriers are still almost totally dependent upon the local exchange carriers for reaching--and being reached--by their customers,
- interexchange carriers pay out nearly one-half of their revenues to these local exchange carriers for the use of their networks for originating and terminating traffic,
- interexchange carriers face the threat of cross-subsidization and discrimination by the local exchange operations of the Bell Operating Companies (BOCs) if the latter are allowed to enter the interLATA long- distance market prematurely, and
- the interLATA long-distance market is working well from an interexchange carrier viewpoint, that is, it is highly competitive but profitable.
The balance of my remarks will address what I regard as the most important of these issues as well as those issues that relate more directly to the interexchange carriers.
