The Costs and Benefits of Long-Distance Entry: Regulation and Non-Price Discrimination

The Costs and Benefits of Long-Distance Entry: Regulation and Non-Price Discrimination A primary goal of the 1996 Telecommunications Act isto encourage competition in long-distance telephonemarkets. Four years after passage of thislegislation, Bell Operating Companies (``BOCs'') havebeen granted permission to offer long-distanceservices in only one state. The regulatory barrier toentry is justified on grounds that the BOCs have theability to discriminate against incumbentlong-distance carriers in the provision of essentialaccess services. We take this premise as given andquantify the critical level of discrimination requiredto offset the positive consumers' surplus gainsassociated with the enhanced competition resultingfrom BOC entry into long-distance markets. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

The Costs and Benefits of Long-Distance Entry: Regulation and Non-Price Discrimination

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Publisher
Springer Journals
Copyright
Copyright © 2001 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1023/A:1007862225626
Publisher site
See Article on Publisher Site

Abstract

A primary goal of the 1996 Telecommunications Act isto encourage competition in long-distance telephonemarkets. Four years after passage of thislegislation, Bell Operating Companies (``BOCs'') havebeen granted permission to offer long-distanceservices in only one state. The regulatory barrier toentry is justified on grounds that the BOCs have theability to discriminate against incumbentlong-distance carriers in the provision of essentialaccess services. We take this premise as given andquantify the critical level of discrimination requiredto offset the positive consumers' surplus gainsassociated with the enhanced competition resultingfrom BOC entry into long-distance markets.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Oct 3, 2004

References

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