What should be done about Telecommunications fraud?

[Master of Ossus]

The way things currently work in the Telecommunications industry, the major providers like SBC and AT&T MUST sell the rights to use their lines to other providers for prices that are basically at-cost. That's why there're so many little phone companies that can charge cheaper rates. Telephones always have spectacularly high entry and fixed costs, with tiny marginal costs, and so the major providers are getting screwed by having to provide their lines for little companies that don't have to pay those large costs, and must only charge marginal costs.

Now, it only gets worse when companies like Sprint and MCI cook the books in order to form pyramid schemes with their stock holders. Basically, both companies lost BILLIONS of dollars in paper assets while they were "re-evaluating" their companies' earning in response to the Arthur Anderson/Enron scandal. Both companies owe hundreds of millions of dollars to SBC and AT&T, and will declare bankruptcy to cancel their billions of dollars worth of debt (neither company ever turned a profit), and go back into business without ever paying AT&T and SBC for their lines. The de-regulation of the telephone industry has made the price for consumers cheaper, but SBC and AT&T are essentially going out of business because of those new rules and the lower prices, and without them the telephone industry will completely collapse because only major providers actually maintain phone lines. So, what should the government do in order to solve the problem? What can be done, and what regulations are needed?

[Edi]

Well, here goes, if it's any help:

Have stringent oversight of telephone companies and actually require those samll companies to pay also for the network costs in proportion to how much they're using or some other measure that prevents charging less than things cost. I'm not familiar with American legislation on the issue at all, nor even very familiar with ours, but Finland has a very well working deregulated telecommunications market. Taking a look at that model and the relevant laws might give some useful clues.

http://www.lvm.fi is the homepage of the Finnish Ministry of Transport and Communications, maybe there would be something useful there. Click on the English title in the bar on the lower portion of the page, it'll give you an English version of the pages. Digging around in the organization chart, there's an item labeled Unit for Networks and Competition, and the personnel working there are listed. Pestering them with email could yield some results, pointers to where to find more info if nothing else.

Edi