NYU's Economides Comments on FCC Telephone-Network Regulations 2003-08-21 20:36 (New York)

Aug. 21 (Bloomberg) -- Nicholas Economides, a professor of economics at New York University's Stern School of Business, made the following comments on Federal Communications Commission rules on local-phone competition in a telephone interview. The order lets states continue to determine prices at which local-phone carriers such as Verizon Communications Inc. must lease parts of their networks to competitors including AT&T. It also limits government regulation of broadband networks, which provide high- speed Internet access:

``It's overwhelmingly expensive to have an entrant create his or her own network'' for selling local calling. ``That part of the decision is correct and hopefully will survive the various legal challenges that I'm sure will exist.''

Concerning broadband access, ``now the FCC says this leasing is going to be totally up to the parties involved,'' rather than states, he said. ``Since the local incumbent is a monopolist, and there are no real other competitors, that puts the party on the other side of the negotiations at a disadvantageous position. That means prices in broadband are going to increase.''

--Tom Giles in the San Francisco newsroom (1)(415) 912 2967, or at tgiles@bloomberg.net. Editor: Bray.

Story illustration: To compare Verizon's historical stock performance with that of the Standard & Poor's 500 Index, see {VZ US COMP SPX }. For a copy of the order, see www.fcc.gov.