Public Interest Comment on Alleged Access Stimulation

Regulatory Studies Program Public Interest Comment on 1Establishing Just and Reasonable Rates for Local Exchange Carriers December 17, 2007 Docket ID: WC Docket No. 07-135; FCC 07-176 The Regulatory Studies Program (RSP) of the Mercatus Center at George Mason University is dedicated to advancing knowledge of the impact of regulation on society. As part of its mission, RSP conducts careful and independent analyses employing contemporary economic scholarship to assess rulemaking proposals from the perspective of the public interest. Thus, this comment on the Federal Communications Commission’s (FCC’s) Notice of Proposed Rule Making (NPRM) on Establishing Just and Reasonable Rates for Local Exchange Carriers, does not represent the views of any particular affected party or special interest group, but is designed to evaluate the effect of the Commission’s proposals on overall consumer welfare. I. Introduction Federal Communications Commission (Commission) regulations allow rural phone carriers to charge long-distance phone companies relatively high fees to access their network when the rural carrier transmits a call. The Commission seeks comment on a proposed plan to address allegations that some carriers are improperly generating increased traffic on their networks in order to profit from unreasonable access rates. This increased demand often comes from chat lines, conference calling, and similar high-volume services. Since long-distance ...