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The Baby and the Bathwater: Utility Competition, But at What Price?

Fortnightly Magazine - November 15 1999

Tel. Co., 552 F. Supp. 131, 186-88 (D.D.C. 1982). Local exchange markets were thought to be natural monopolies in 1982, and the lines of business restrictions on the Bell operating companies were imposed to prevent anti-competitive leveraging of local exchange market power into long-distance, information services and customer equipment markets.

4 AT&T Corp. v. Iowa Utilities Board, 119 S. Ct. at 734-36, 739.

5 Id., at 735.

6 The Court concluded that in granting new entrants access to network elements, the FCC could not entirely disregard the availability of elements from sources outside the incumbent's network, nor could it treat any increased cost or decreased service quality whatsoever flowing from the incumbent's failure to provide a particular element as establishing a "necessity" and an "impairment" of the entrant's ability to provide services.

7 Iowa, 119 S. Ct. at 734-35.

8 Id. 119 S. Ct. at 753 (Breyer, J., concurring in part and dissenting in part).

9 Id. 119 S. Ct. at 753-54 (Breyer, J., concurring in part and dissenting in part).

10 New Mexico v. N.M. PUC, 980 P.2d 55, 62 (N.M. 1999).

11 Note also that in an appeal to the Michigan Supreme Court, the incumbent electric utilities successfully contended that the state commission went too far in ordering the utilities to implement an experimental retail wheeling program. The State Court of Appeals had affirmed the commission's order, based on the commission's broad statutory authority to, inter alia, "control and supervis[e] ¼ the business of transmitting and supplying electricity." Consumers Power Co. v. Mich. PSC, 227 Mich. App. 442, 451-52 (1998). In a 4-3 decision, the state Supreme Court reversed, ruling that the commission lacked statutory authority to order a utility to transmit a third-party provider's electricity through its system to a utility customer, and that the commission had exceeded its authority in ordering utilities to engage in specific management practices or to enter into certain contracts. Consumers Power Co. vs. Michigan PSC, Nos. 111482-3, et al., slip op. (Michigan Sup. Ct. June 29, 1999).

12 176 F.3d 1090 (8th Cir. 1999).

13 Northern States Power, 176 F.3d at 1095.

14 Id.

15 Areeda, Phillip, "Essential Facilities: An Epithet In Need Of Limiting Principles," 58 Antitrust Law Journal 1990, pp. 841-853.

16 The determination of whether a facility is essential in a particular market ought to take the likely regulated price of that facility into account.

17 Iowa, 119 S. Ct. at 753 (Breyer, J., concurring in part and dissenting in part).

18 Application of Bell Atlantic-New Jersey, Inc. for Approval of an Extension of its Plan for an Alternative Form of Regulation, 291 N.J. Super. 77 (App. Div. 1996).

19 Joint Petition of Nextlink Pennsylvania, Inc., Pa. P.U.C., Dkt. Nos. P-00991648, P-00991649, Aug. 26, 1999 (Order entered Sept. 30, 1999).

20 Iowa, 119 S. Ct. at 754 (Breyer, J., concurring in part and dissenting in part).

21 See Mass Regs. Code tit. 202, section 12.04(2) (1998) (a natural gas or electric distribution company may provide certain assets or services to an affiliate provided that the price charged is equal to