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The Role of Incentives for Opening Monopoly Markets: Comparing GTE and BOC Cooperation with Local Entrants

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  • Mini, Federico
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    Abstract

    While the 1996 Telecommunications Act requires all incumbent local telephone companies to cooperate with local entrants, section 271 of the Act provides the Bell companies--but not GTE--additional incentives to cooperate. Using an original data set, I compare the negotiations of AT&T, as a local entrant, with GTE and with the Bell companies in states where both operate. My results suggest that the differential incentives matter: The Bells accommodate entry more than does GTE, as evidenced in quicker agreements, less litigation, and more favorable prices offered for network access. Consistent with this, there is more entry into Bell territories. Copyright 2001 by Blackwell Publishing Ltd

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Journal of Industrial Economics.

    Volume (Year): 49 (2001)
    Issue (Month): 3 (September)
    Pages: 379-414

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    Handle: RePEc:bla:jindec:v:49:y:2001:i:3:p:379-414

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    Cited by:
    1. Downes, Tom & Greenstein, Shane, 2007. "Understanding why universal service obligations may be unnecessary: The private development of local Internet access markets," Journal of Urban Economics, Elsevier, vol. 62(1), pages 2-26, July.
    2. Brown, Keith S. & Zimmerman, Paul R., 2004. "The effect of Section 271 on competitive entry into local telecommunications markets: an initial evaluation," Information Economics and Policy, Elsevier, vol. 16(2), pages 215-233, June.
    3. Shane Greenstein & Michael Mazzeo, 2003. "Differentiation Strategy and Market Deregulation: Local Telecommunication Entry in the Late 1990s," NBER Working Papers 9761, National Bureau of Economic Research, Inc.
    4. Mattos, C├ęsar, 2009. "Open access policies, regulated charges and non-price discrimination in telecommunications," Information Economics and Policy, Elsevier, vol. 21(4), pages 253-260, November.

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