Pennsylvania PUC EmbracesConsumer Choice

Today, Citizens for a Sound Economy applauded the Pennsylvania Public Utilities Commission’s (commission) decision to pullback from an unprecedented proposal to split Pennsylvania Verizon in 2. The commission hatched the scheme to split the company into separate retail and wholesale units in 1999. Thankfully, the PUC recognized the consumer harm such ill-conceived regulation would have caused.

Today, Jerry Ellig, research fellow at Citizens for a Sound Economy Foundation issued the following statement:

“Today’s decision is a victory for Pennsylvania consumers and the competitive telecommunications market. The structural separation considered would have raised costs in the short term and could have impaired competition in the long run.

“No one believes that local telephone networks are natural monopolies any more. The true competitive vision is multiple firms competing in all markets using their own facilities. Structural separation assumes that the local network must forever remain a monopoly subject to regulation.

“Structural separation is not necessary to induce incumbent local phone companies to open their networks to competitors. In New York, Texas, Kansas, and Oklahoma, state regulators and the Federal Communications Commission agree that the incumbent phone companies have complied with the Telecommunications Act’s market-opening requirements. In all four cases, they did so without structural separation.

“I doubt that structural separation can produce the lower prices, higher quality service, and increased options that would be produced by facilities-based competition in a deregulated market. Reforms are desperately needed, but reform should mean less regulation, not more.”

Dr. Jerry Ellig is available for comment.