Return to the Story: Redacted: http://www.newnetworks.com/Redactedstory.htm For Your Amusement: FCC Replaces Outmoded Long-Distance Rules With New Protections For Consumers, 8/31/07 (i) Stand-Alone Long Distance Market Share 1. Consistent with the Commission's analysis in the BOC Merger Orders, we first consider AT&T's and Verizon's market shares of wireline customers that have a presubscribed interexchange carrier (PIC).[1] Using this methodology, the data in the record suggest that Verizon and AT&T have significant market shares in most of their franchise areas within their respective territories.[2] Under this approach, AT&T's market share of stand-alone, interstate, long distance services ranges from [REDACTED] percent to [REDACTED] percent, with a median market share of [REDACTED] percent.[3] The respective figures for Verizon are [REDACTED] percent, [REDACTED] percent, and [REDACTED] percent.[4] 2. As discussed above, however, these market shares likely overstate AT&T's and Verizon's respective shares of the interstate long distance market, and their potential market power, for a number of reasons. First, this analysis is limited to customers who have a PIC. In recent years, however, an increasing number of customers are choosing to have no PIC. For example, [REDACTED] of AT&T's residential customers and [REDACTED] of Verizon's residential customers have no PIC.[5] More importantly, this approach to calculating market shares fails to take into account possible usage substitution between wireless and wireline long distance services (for customers that subscribe to both wireless and wireline telephone services) or between wireline and over-the-top VoIP (for customers that subscribe to both wireline telephone service and broadband Internet access service). Although we lack the data necessary to estimate the impact of usage substitution between traditional wireline long distance service and long distance service provided by over-the-top VoIP, we can calculate market shares in a way that attempts to capture usage substitution between wireline and wireless long distance service providers.[6] Taking such wireline-wireless usage substitution into account, AT&T's market share ranges from [REDACTED] percent to [REDACTED] percent, with a median market share of [REDACTED] percent.[7] The corresponding figures for Verizon's residential customers are [REDACTED] percent, [REDACTED] percent, and [REDACTED] percent.[8] Given the large and growing percentage of consumers who subscribe to both wireline service and wireless or broadband Internet access service,[9] and who thus have the ability to shift interstate, long distance usage in response to price changes, we find that these market share numbers are likely to provide a more accurate picture of AT&T's and Verizon's market power for the stand-alone, interstate, long distance market within their respective franchise areas.[10] (ii) Bundled Local and Long Distance Market Shares 3. As discussed above, an increasing number of customers are shifting to bundled service offerings and away from stand-alone long distance offerings. We acknowledge the conceptual difficulties associated with estimating market shares for this bundled services market; nevertheless, we believe that we have adopted a conservative approach, which, if anything, will again tend to overstate AT&T's and Verizon's respective market positions.[11] We estimate that, for its franchise areas within its in-region states, AT&T's market share of bundled local and long distance services ranges from [REDACTED] percent to [REDACTED] percent, with a median market share of [REDACTED] percent.[12] The corresponding figures for Verizon's residential customers are [REDACTED] percent, [REDACTED] percent, and [REDACTED] percent.[13]
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[1] Id. Bell Atlantic's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. [1] Id. GTE's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. [1] Id. Bell Atlantic's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. We do not report figures for T-3 services in GTE's franchise areas or ATM data services in Bell Atlantic's franchise areas or GTE's territories because we have insufficient data for fewer than [REDACTED] of these franchise areas. See Appendix C, Table 2. [1] Id. Bell Atlantic's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. [1] Id. GTE's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. [1] Appendix C, Table 3. AT&T's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. [1] Id. AT&T's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. [1] Id. AT&T's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. [1] Id. AT&T's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. See Appendix C, Table 3 for individual state results for Frame Relay services within AT&T's franchise areas with more than 30 observations. [1] Appendix C, Table 4. Bell Atlantic's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. [1] Id. GTE's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. [1] Id. Bell Atlantic's market share ranges from [REDACTED] with an accompanying HHI of [REDACTED] to [REDACTED] with an accompanying HHI of [REDACTED]. |