Tuesday, October 30, 2007

VZ Forbearance could cost $2.4B

According to a study by QSI Consulting, if VZ gets forbearance in the 6 MSA's, it will cost customers $2.4B in higher costs. (I found the study on the Huffington)

I didn't see this is the EDGAR filings of any CLEC's but Cbeyond:

Verizon has said that if it wins its "forbearance" relief, it will charge its competitors according to a different price schedule - one that's higher than the prices they pay now. For example, in Boston, a particular type of circuit for which a competitive company now pays $572.12 monthly for under the current pricing plan would cost $2,375.50 under the price schedule Verizon has said it will use. In New York, another type of service that competitors needs now costs $60.57 monthly; it would go to $328.70 under the plan Verizon has in mind.

Art Brodsky then goes on to quote a GAO stufy about the effect forbearance has already had on big business circuits:

There's little competition around already for consumers and, surprisingly, for big business.... But the Government Accountability Office, in a landmark study found that in places where the FCC has already given telephone companies new "pricing flexibility" on the assumption that competition would keep prices in line, prices are either the same or higher than in places where prices are still regulated. That's because the market for certain heavy-duty services used by businesses is much less competitive than previously thought.

Brodsky agrees with me that the FCC is way out of touch on what is actually happening in the industries that they regulate. Not that K-Mart cares at all; he has his mission after all. Brodsky says it here:

"The majority of the FCC believes in the myth of competition, even as it helps to kill off competitors. There's no reason to think that at the end of the year, Verizon won't get much of what it wants when this request comes up for a decision, even though there are lots of reasons it shouldn't.[source]

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