This paper discusses the welfare effects of entry by a vertically integrated access and long-distance service provider into the long-distance market. Using a stylized model of these markets, we conclude that substantial net consumer benefits arise when a vertically integrated firm is created by the entry of a LEC into the long-distance market, and these gains are mostly achieved from declines in supra-competitive profits received by long-distance incumbents. We find that these gains dominate losses in producer surplus that could arise even it integrated firm entry were to displace more efficient long-distance providers. Copyright 1998 by Kluwer Academic Publishers
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Volume (Year): 13 (1998) Issue (Month): 2 (March) Pages: 183-96 Download reference. The following formats are available: HTML
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