GAO: overbuilds cut rates 15%-41%: report renews focus on competitive markets, though cable says sample is too small.(Policy)(General Accounting Office)
Multichannel News, February, 2004 by Haugsted, Linda
The General Accounting Office has completed a seven-month audit of six markets with competitive wireline telecommunications providers, concluding that consumer fees are generally lower in "overbuilt" markets than elsewhere. The report, released Feb. 10, found rates for bundled services in the competitive markets were 15% to 41% lower than nearby markets with comparable demographics.
The GAO came to this conclusion by tracking the pricing activity in pairs of cities--for example, Augusta, Ga., where Knology Inc. competes with Comcast Corp. and BellSouth Corp.; and nearby Savannah, served by Comcast and BellSouth. The report underscores an argument overbuilders have always made: Competition does lower rates significantly, according to Jim Bailer...
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