Review of Industrial Organization
12: 837–840, 1997.
Telecommunications Competition: The Last Ten Miles. Ingo Vogelsang and Bridger
Mitchell. Cambridge, MA: MIT and AEI Presses, 1997, 364 pages, $35.00.
Telecommunications Competition: The Last Ten Miles is an invaluable guide to
regulatory policy in general, and competition policy in particular, in today’s markets
for local telecommunications services. Although the book focuses on policy in the
United States’ telecommunications industry, it also provides a useful review of the
corresponding policy in the United Kingdom.
My review of this important contribution to the literature proceeds in three parts.
First, I summarize the contents of the book. Second, I recount the authors’ central
themes and messages. Third, I emphasize some of the book’s many strengths.
The Book’s Contents
The authors provide an overview of theirbook in Chapter1.Theyexplain theirfocus
on the impacts of technological change and regulatory policy on competition in
the local telecommunications industry. Chapter 2 describes some important details
about local telecommunications markets and technologies, including a list of the
key industry participants and the services they provide. The interrelated nature
of service provision is stressed, and the key potential “bottlenecks” to effective
competition are identiﬁed. Chapter 2 also provides an accessible description of
the recent technological changes that have facilitated competition in “the last ten
miles” of the telecommunications network, i.e., the local exchange. Chapter 3
supplements its predecessor with a more technical and more detailed description
of the architecture of the telephone network. Potential points of access to and
interconnection of networks are emphasized.
Having provided the reader with a working knowledge of the technology of local
telecommunications markets, the authors turn to a discussion of the regulation of
these markets in Chapter 4. The chapter begins with a review of the rationale for
regulation of the local exchange, emphasizing the potential role of the incumbent
telephone company’s local exchange network as an “essential facility”, i.e., one
that is instrumental to the operation of potential competitors, and one that these
competitors cannot duplicate economically. A concise and informative summary of
regulatory policy in the U.S. telecommunications industry follows. The summary
includes a discussion of early antitrust policy in the telecommunications industry,