| Abstract: | We analyze whether lifting the remaining line-of-business restraints in the Modified Final Judgment (thus permitting the Regional Bell Operating Companies to provide interLATA calling services and to manufacture equipment) would plausibly lead the RBOCs to practice predatory pricing. We assume throughout that the regulated portions of the RBOCs' business would be subjected to price-cap or similar incentive-based regulation and that equal access to bottleneck services would be enforced. Despite employing a very broad definition of predation, we find that it is highly unlikely that the RBOCs would profitably engage in predatory pricing. |
