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FCC Needs To Monitor a Changing International Telecommunications Market
In response to a congressional request, GAO examined whether the Federal Communications Commission (FCC) can effectively monitor and gauge the impact of recent FCC and congressional actions designed to increase competition in the international telecommunications market by reducing the entry barriers for the U.S. portion of the market. GAO found no general consensus that these actions would increase competition in the international market. Further, FCC does not monitor market development and cannot measure or gauge the competitive impact of its decisions on the market. The Common Carrier Bureau, responsible for implementing these decisions, recognizes the importance of monitoring the industry, but stated that its strained resources have made it difficult to track industry development. Therefore, GAO believes that, unless FCC develops an industry analysis capability, it cannot adequately measure market competitiveness to ensure that its actions are having the desired market behavior effects.
Government agencies and businesses that require significant capacity to meet voice and data needs depend on dedicated access services. This segment of the telecommunications market generated about $16 billion in revenues for the major incumbent telecommunications firms in 2005. The Federal Communications Commission (FCC) has historically regulated dedicated access prices. With the Telecommunications Act of 1996, FCC reformed its rules to rely on competition to bring about cost-based pricing. Starting in 2001, FCC granted pricing flexibility on the basis of a proxy measure of competition. GAO examined (1) the extent that alternatives are available in areas where FCC granted pricing flexibility, (2) how prices have changed since the granting of pricing flexibility, and the effect on government agencies, and (3) how FCC monitors competition. GAO's work included analyzing data on competitive alternatives, list prices, and average revenue, and interviewing FCC officials and industry representatives.
Catalog of reports, decisions and opinions, testimonies and speeches.
Contains an inventory of evaluation reports produced by and for selected Federal agencies, including GAO evaluation reports that relate to the programs of those agencies.
Contains an inventory of evaluation reports produced by and for selected Federal agencies, including GAO evaluation reports that relate to the programs of those agencies.