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The Economic Logic for Conditioning Bell Entry into Long Distance on the Prior Opening of Local Markets

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  • Schwartz, Marius

Abstract

One of the most important and most contentious issues for regulation and competition raised by the 1996 Telecommunications Act is when to authorize the regional Bell companies to offer long-distance services. The Department of Justice (DOJ) adopted a standard requiring that a Bell's local market must first be irreversibly open to competition. This paper analyzes the competitive benefits and costs of authorizing Bell entry, explains the DOJ's standard, and argues that the incentives created by this standard will help achieve the Act's competitive goals more efficiently and rapidly than other standards, ultimately reducing the need for intrusive regulation. Copyright 2000 by Kluwer Academic Publishers

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Bibliographic Info

Article provided by Springer in its journal Journal of Regulatory Economics.

Volume (Year): 18 (2000)
Issue (Month): 3 (November)
Pages: 247-88

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Handle: RePEc:kap:regeco:v:18:y:2000:i:3:p:247-88

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Web page: http://www.springerlink.com/link.asp?id=100298

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Cited by:
  1. Koski, Heli A. & Majumdar, Sumit K., 2002. "Paragons of virtue? Competitor entry and the strategies of incumbents in the U.S. local telecommunications industry," Information Economics and Policy, Elsevier, vol. 14(4), pages 453-480, December.
  2. Simran Kahai & David Kaserman, 2007. "Effective regulation versus tacit collusion in the long-distance market: an empirical analysis," Journal of Regulatory Economics, Springer, vol. 32(3), pages 247-257, December.

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