The New York Public Service Commission (PSC) has decided to review its experimental "Open Market Plan" to introduce competition to the local telephone market in the Rochester, NY area. The action was based largely on a complaint by AT&T Communications of New York, Inc., alleging that prices for wholesale services provided by Rochester Telephone Corp, the incumbent local exchange carrier (LEC), impeded the development of the resale market in the area.
AT&T argued that the 5-percent wholesale discount approved by the PSC as part of its open-market experiment was inadequate. According to AT&T, the minimum discount that would permit resellers to break even was 35 percent. It added that an existing cap on minutes of flat rate residential service available to resellers imposed a barrier on market entry, as did the reluctance of the LEC to readily transfer information on existing customer service features.
The PSC agreed with AT&T that the "competition framework" in the Rochester market was not working as expected. Nevertheless, it turned aside a claim by Time Warner AxS of Rochester, L.P., a new market entrant, that the PSC should apply extra caution in promoting resale opportunities in the LEC market.