Intermodal competition in local telecommunications markets

In this study, we model local competition between Incumbent Local Exchange Carriers (ILECs) and Competitive Local Exchange Carriers (CLECs) and explicitly account for competitive effects from wireless service and high-speed connections. We develop and estimate a pooled model of local competition using both cross-sectional and time series data from published FCC and other governmental sources at the state level. We find that there is substantial competition between ILECs and CLECs and that wireless and high-speed services adversely affect ILEC lines. We conclude that the local market definition should be expanded for purposes of deregulation.