The competitive incentives of vertically integrated local exchange carriers: An economic and policy analysis
✍ Scribed by David S. Sibley; Dennis L. Weisman
- Publisher
- John Wiley and Sons
- Year
- 1998
- Tongue
- English
- Weight
- 191 KB
- Volume
- 17
- Category
- Article
- ISSN
- 0276-8739
No coin nor oath required. For personal study only.
✦ Synopsis
The U.S. Congress passed sweeping telecommunications reform legislation in 1996 that will enable the Regional Bell Operating Companies (RBOCs) to enter the interLATA long-distance market once certain conditions are met. This legislation empowers the state public service commissions, the Federal Communications Commission and the Justice Department to determine collectively when RBOC entry into interLATA long-distance markets satisfies the public interest. This article reveals that as long as RBOC long-distance market shares remain below certain critical levels, the RBOCs do not have the incentives (despite having the opportunity) to discriminate against their downstream competitors. These findings suggest that a public policy focused exclusively on eliminating the opportunity to discriminate may needlessly delay RBOC entry into interLATA markets and thereby deprive consumers of the benefits of enhanced competition.