Internet Voice, 'Cyberbypass', Competitive Efficiency

This paper considers the competitive issues raised by the continuing evolution of public switched telephone network development toward an open data network. Adopting a platform hierarchy set forth by the National Research Council, the paper agrees that some higher level services may indeed reduce traditional telephone company revenues, but argues that it would be counterproductive for regulators to devise bans or adjust prices if they could. Regulators faced with unbundling may ensure any necessary revenue recovery through tariff rebalancing among facilities providers which provide competitive carriage through rebalancing strategies that remain competitively neutral. Suggested strategies include cost-based usage charges for data calls, fixed cost write-offs and increases in subscriber line charges.