The Heartland Institute, a policy think tank located in Chicago that focuses on issues of state and local policy, has started publishing a new telecom newsletter called IT Update. It’s got columns from a lot of knowledgeable telecom policy folks, including Alfred Kahn, Solveig Singleton, Sonia Arrison, and Clyde Wayne Crews.
The January issue has an article of mine that relates to the policy brouhaha in Illinois over the price that SBC is allowed to charge to CLECs for use of their facilities.
The fault lies in the misguided notion that regulators can measure or determine the costs of operating telephone networks. At best, they can get an approximate estimate of these dynamic and ever-changing costs. At worst, they will succumb to political pressures and set the rates too low. Our traditional cost-based regulatory approach is doomed to failure from the outset, because it is based on the false assumption that a political body can or would find the objective “true cost” of providing telephone service. …
Instead of demonizing SBC or its competitors, we should ask why the FCC and the ICC have the presumption to claim they can amass all of the cost knowledge, actual or hypothetical, needed to make this bizarre regulation work.