ABSTRACT
The public utility model can be used to apply to all competitors in a market. The Averch-Johnson effect, i.e., rate of return regulation creates incentives that may distort the input choices of a regulated firm away from production at minimum cost, is one example. Effective competition is clearly curtailed when firms are required to give advance notice of innovative marketing plans and have those initiatives be subject to public comment and regulatory review. A non-dominant carrier would also be able to institute or discontinue service more easily under our proposed procedures. Upon grant of initial Section 214 authorization we would also grant a non-dominant carrier blanket authority for unlimited expansion of circuits into its authorized geographic service areas. An important structural characteristic of the marketplace that confers market power upon a firm is the control of bottleneck facilities. A firm controlling bottleneck facilities has the ability to impede access of its competitors to those facilities.
