Two recent decisions from Hawaii and Michigan illustrate some of the issues now arising on the question of resale of telephone service by local exchange carriers (LECs).
In Michigan, the state public service commission has directed the state's LECs to offer all basic local exchange services for resale in a nondiscriminatory manner to competitors and affiliates at wholesale rates. It defined "wholesale rates" as retail rates less the avoided costs to the LEC.
Elsewhere, the Hawaii Public Utilities Commission (PUC) has prohibited the resale or use of residential lines to offer business services, citing concerns about the potential for arbitrage if resale or residential access is left unrestricted. It acted in the first phase of a planned three-part blueprint to restructure the state's telecommunications industry.