Crandall Releases Assessment of Competitive Local Exchange Carriers

Robert Crandall, chairman of Criterion Economics, L.L.C., released his most recent paper, "An Assessment of the Competitive Local Exchange Carriers Five Years After the Passage of the Telecommunications Act," at USTA on June 27. Crandall's paper stated that the choice of network and business plan were the keys to CLEC success, and despite recent criticism the strongest CLECs are thriving. He found that CLECs that succeeded were those that built out significant portions of their own networks in order to provide a service superior to the incumbent carriers. He added that firms such as Allegiance and McLeod have thrived even though their operations depend largely on leasing or reselling from the incumbents, disproving claims that the incumbents are responsible for CLEC failures. He also found that the strongest CLECs still have greater market values-- as measured in long term value per access line-- than the Baby Bells, and was critical of firms such as ICG and Teligent, who overexpanded, attempting to reach new markets at too rapid a pace.