Discussant Comments on Papers by Andrew Joskow, Daniel Rubinfeld, and Janusz Ordover and Margaret Guerin-Calvert

Discussant Comments on Papers by Andrew Joskow, Daniel Rubinfeld, and Janusz Ordover and Margaret... 220 MARIUS SCHWARTZ Joskow correctly notes that this standard reflects a shift in the focus of antitrust concern with RBOC entry away from “leveraging local regulated monopolies in[to] ...long distance” – the main concern of the MFJ – towards opening up local mar- kets to competition. Some have mis-stated this point, however, in claiming that RBOC long distance entry poses no competitive risk and is merely being used as a “hostage” to pry open the RBOCs’ local markets. This portrayal is misleading on two counts. First, if RBOC entry occurs and local competition fails to develop, then over time competition in long-distance will face a growing threat. As new access arrangements become necessary, there will be greater scope for an RBOC to discriminate against long-distance competitors dependent on it for local access, because regulatory policing is problematic in the case of new arrangements for which performance benchmarks are lacking. Second, authorizing RBOC entry before the new arrangements needed by local competitors have been implemented will make it considerably harder to foster local competition. Local competition will suffer not only because of the loss of “carrot” (or “hostage” depending on one’s Perspective) – that having secured its desired long-distance authority, http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Discussant Comments on Papers by Andrew Joskow, Daniel Rubinfeld, and Janusz Ordover and Margaret Guerin-Calvert

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2000 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1023/A:1007883428434
Publisher site
See Article on Publisher Site

Abstract

220 MARIUS SCHWARTZ Joskow correctly notes that this standard reflects a shift in the focus of antitrust concern with RBOC entry away from “leveraging local regulated monopolies in[to] ...long distance” – the main concern of the MFJ – towards opening up local mar- kets to competition. Some have mis-stated this point, however, in claiming that RBOC long distance entry poses no competitive risk and is merely being used as a “hostage” to pry open the RBOCs’ local markets. This portrayal is misleading on two counts. First, if RBOC entry occurs and local competition fails to develop, then over time competition in long-distance will face a growing threat. As new access arrangements become necessary, there will be greater scope for an RBOC to discriminate against long-distance competitors dependent on it for local access, because regulatory policing is problematic in the case of new arrangements for which performance benchmarks are lacking. Second, authorizing RBOC entry before the new arrangements needed by local competitors have been implemented will make it considerably harder to foster local competition. Local competition will suffer not only because of the loss of “carrot” (or “hostage” depending on one’s Perspective) – that having secured its desired long-distance authority,

Journal

Review of Industrial OrganizationSpringer Journals

Published: Oct 16, 2004

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