Article at a glance:
In most telephone markets, incumbent companies still dominate the "last mile"—the connections between customers and the rest of the network. Over the past decade, regulators have tried to break that bottleneck by making it easier for alternative technologies, such as mobile wireless, cable, and voice over Internet Protocol (VOIP), to reach households and businesses. These regulations and competitive technologies are beginning to eat into the incumbents' voice revenues, which still account for 60 to 80 percent of their total revenues and for most of their profits.
The take-away
Regulation and technology have finally sparked competition in the consumer telephone service market. That might seem to be a good thing. But many regulators now find themselves behind the curve—still operating in an environment presupposing that the last-mile monopoly has yet to be broken. How will infrastructure be maintained and developed if the incumbents, who generally pay for universal service, are severely weakened?