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Consequences of Vertical Separation and Monopoly: Evidence From the Telecom Privatizations

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  • Bruno Viani

Abstract

Policy variation across countries on the use of mandatory vertical separation and statutory monopoly allows the assessment of their impact on basic telephone services (local, long distance, and international service). Panel data analysis from 56 countries during the 7-year period following the privatization of the main telephone provider indicates that vertical separation and monopoly harm the consumers that were supposed to benefit: the downstream users of international telephony and the upstream users of residential local telephony. Mandatory vertical separation reduces the usage of international telephone service and the number of fixed lines in service, whereas statutory monopoly reduces the amount of fixed lines in service and increases the price of local residential telephony.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/08997764.2011.573381
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Media Economics.

Volume (Year): 24 (2011)
Issue (Month): 2 ()
Pages: 70-97

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Handle: RePEc:taf:jmedec:v:24:y:2011:i:2:p:70-97

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  1. Nakil Sung & Yong-Hun Lee, 2002. "Substitution between Mobile and Fixed Telephones in Korea," Review of Industrial Organization, Springer, vol. 20(4), pages 367-374, June.
  2. Bruno Viani, 2007. "Monopoly rights in the privatization of telephone firms," Public Choice, Springer, vol. 133(1), pages 171-198, October.
  3. Fink, Carsten & Mattoo, Aaditya & Rathindran, Randeep, 2003. "An assessment of telecommunications reform in developing countries," Information Economics and Policy, Elsevier, vol. 15(4), pages 443-466, December.
  4. Leslie E. Papke, 1991. "Tax Policy and Urban Development: Evidence From The Indiana Enterprise Zone Program," NBER Working Papers 3945, National Bureau of Economic Research, Inc.
  5. Crémer, Jacques & Rey, Patrick & Tirole, Jean, 1999. "Connectivity in the Commercial Internet," IDEI Working Papers 87, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2000.
  6. Duso, Tomaso & Roller, Lars-Hendrik, 2003. "Endogenous deregulation: evidence from OECD countries," Economics Letters, Elsevier, vol. 81(1), pages 67-71, October.
  7. Hausman, Jerry & Tardiff, Timothy & Belinfante, Alexander, 1993. "The Effects of the Breakup of AT&T on Telephone Penetration in the United States," American Economic Review, American Economic Association, vol. 83(2), pages 178-84, May.
  8. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
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Cited by:
  1. Francesc Trillas & Miguel Angel Montoya, 2008. "The degree of commitment to regulator independence: measurement and impact," Hacienda Pública Española, IEF, vol. 185(2), pages 89-114, July.
  2. Bruno Viani, 2007. "Monopoly rights in the privatization of telephone firms," Public Choice, Springer, vol. 133(1), pages 171-198, October.

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