This CEI/NMRC report finds that the CFA study takes positions and makes claims not supported by empirical evidence and misapplies data to support conclusions. The CFA study paints a picture that competition has failed in the telecom industry, and the industry will re-monopolize and increase consumer prices. The CEI and NMRC report authors, Solveig Singleton and Stephen Pociask, strongly dispute these CFA study claims.

December 16, 2003

Telecommunications Industry Litigation Reporter

News Brief: Is 'Phone Competition at the Crossroads'

Public-Policy Groups Challenge Phone Competition Report

The Competitive Enterprise Institute and the New Millennium Research Council have joined efforts in their criticism of a report on phone competition issued earlier this year by the Consumer Federation of America. Is 'Phone Competition at the Crossroads': An Analysis of the Consumer Federation of America's Local Competition Study, report released (Competitive Enter. Inst. Dec. 9, 2003).

In October 2003 the CFA issued a study titled "Competition at the Crossroads: Can Public Utility Commissions Save Local Phone Competition"

The CEI/NMRC analysis suggests that the CFA study is inaccurately pessimistic in its conclusion that telecommunications competition has failed and that the industry will again monopolize, with a corresponding increase in consumer prices.

Instead, two telecommunications experts take dead aim at the CFA's assumptions and conclusions.

Solveig Singleton, senior policy analyst for CEI, says "the CFA study ignores the lessons of the telecom meltdown; sustainable investment requires stable incentives, not regulatory handholding of one market segment."

Her co-author, Stephen Pociask, president of TeleNomic Research LLC, echoes Singleton's sentiment that more regulation is the last thing the telecommunications industry needs, contrary to what the CFA study asserts.

The CEI/NMRC study disputes the CFA's position that current pricing structure for telecommunications network elements is reasonable, arguing instead that it should be phased out in order to allow real competition.

CEI is a nonprofit public-policy organization dedicated to the principles of free enterprise and limited government. The NMRC fosters policy research primarily in the fields of telecommunications and technology.

December 10, 2003

TR's State NewsWire.......with TRINSIGHTŪ

The Competitive Enterprise Institute (CEI) and the New Millennium Research Council (NMRC) today released a study analyzing an October 2003 Consumer Federal of America policy study. They conclude that the CFA study takes positions and makes claims that aren't supported by empirical evidence and misapplies data to support conclusions.

"The CFA study paints a picture that competition has failed in the telecom industry, and the industry will remonopolize and increase consumer prices," the groups said. The study by CEI and NMRC "strongly disputes" those claims. The CEI and NMRC study, "Is Phone Competition at the Crossroads? An Analysis of the Consumer Federation of America's Local Competition Study," asserts that competition is developing at a robust pace and more regulation is "the last thing the industry needs."

One of the study's authors, Stephen B. Pociask, president of TeleNomic Research LLC, said evidence suggested that unbundled network element (UNE) prices are set so low that they represent a corporate subsidy. Solveig Singleton, senior policy analyst for CEI and the study's other author, recommended that state regulators recognize that unbundling regulations "hurt consumers more than they help." The study is available online at www.newmillenniumresearch.org. - Gayle Kansagor

Technology Daily Telecom: The Competitive Enterprise Institute (CEI) and the New Millennium Research Council commissioned a study to evaluate a Consumer Federation of America (CFA) review that refuted claims that less regulation will lead to greater competition in the telecommunications industry. The new study finds fault with the CFA study, arguing that more regulation is the last thing the industry needs and tha! t allowing competitors access to the networks of the regional Bell telephone companies does not lead to more investment in networks. The CFA study "ignores the lessons of the telecom meltdown; sustainable investment requires stable incentives, not regulatory handholding of one market segment," said Solveig Singleton, a senior policy analyst for CEI.