Review of Industrial Organization 18: 133–135, 2001.
Industry Structure and Pricing. The New Rivalry in Infrastructure, Mark A. Jam-
ison. Boston: Kluwer Academic Publishers, 1999, 207 pages, US$110.
According to Jamison, a new type of rivalry in infrastructure industries arises
as changes in technology and regulatory policy blur the boundaries of these in-
dustries. In telecommunications, the well-deﬁned and regulated industry offering
mainly local and long-distance telephone services has been transformed through
its increasing combination with computing, electronic media, and publishing. With
the advent of the Internet, many computer and media companies are edging into
the business of transporting electronic communications that was once the exclu-
sive preserve of regulated telecommunications monopolies. Firms such as AT&T,
Deutsche Telekom, and Nippon Telegraph and Telephone (NTT) are now real or
potential competitors for each other and for a variety of non-utility companies.
In the energy market, electricity and gas utilities are facing actual and potential
competition from each other and from non-utility providers. The increasingly mul-
tidimensional actual and potential competition that ﬁrms in infrastructure industries
face is the subject of this book. This is the “new rivalry in infrastructure” in the title
of the book.
Jamison refers to this “new rivalry in infrastructure” as multilateral rivalry
(MLR). His focus in the book is on whether several regulatory policies that are
based on the contestable markets model remain appropriate in the MLR frame-
work. The thrust of his argument is that the models traditionally used to analyze
competition in infrastructure industries focus on actual or potential competition
from entrants that only serve all or part of the incumbent’s market. They do not
analyze the competition the incumbent may face from ﬁrms that serve a subset of
the incumbent’s market as well as other markets that the incumbent does not serve.
Such entrants may be able to exploit economies of scale and scope not available
to entrants that serve only a subset of the incumbent’s market. Jamison ﬁnds that
when ﬁrms that may be in a position to protect or extend their monopoly positions
are faced with MLR, regulatory policies arising from the contestability literature
that ignores MLR are too generous to such ﬁrms. The new rivalry in infrastructure
makes regulation more difﬁcult as it becomes impractical or even impossible to