A New View of Scale and Scope in the Telecommunications Industry: Implications for Competition and Innovation
AbstractTelecommunication economic analysis has largely relied upon a conventional economic framework that has its roots in neoclassical analysis that emerged almost a hundred years ago, and has contributed to reshaping the direction of economic policies by attacking the premises of the 1996 Telecommunications Act, and providing far greater leeway to incumbents, as well as challenging the economic efficiency of new entrants. Common approaches based upon a large number of simplifying assumptions that include,for instance, the idea that the technology is exogenous. Such hypotheses make little sense at a conceptual level. In addition, this idea is largely contradicted by the short period during which the sector achieved some level of competition around the 1900's and 2000. Not only have economists not thought about any number of such hypotheses, but they have also failed to consider how they might have an impact on their analysis. Evaluating a number of such issues in this paper, we are able to show how conventional economic analysis, uncritically applied to the sector, contributed to the undoing of the 1996 Telecommunications Act and of much of the competition it helped facilitate.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2516.
Date of creation: Dec 2005
Date of revision:
scale and scope; competition; telecommunications industry structure;
Find related papers by JEL classification:
- L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
- L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
- K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-09 (All new papers)
- NEP-COM-2007-04-09 (Industrial Competition)
- NEP-CSE-2007-04-09 (Economics of Strategic Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nicholas Economides, 1997. "The Tragic Inefficiency Of the M-ECPR," Working Papers 98-01, New York University, Leonard N. Stern School of Business, Department of Economics.
- Adam D. Thierer, 1994. "Unnatural Monopoly: Critical Moments in the Development of the Bell System Monopoly," Cato Journal, Cato Journal, Cato Institute, vol. 14(2), pages 267-285, Fall.
- anonymous, 1981. "Communications," Management Science, INFORMS, vol. 27(9), pages 1088-1091, September.
- Posner, Richard A, 1975. "The Social Costs of Monopoly and Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 807-27, August.
- Williamson, Oliver E, 1971. "The Vertical Integration of Production: Market Failure Considerations," American Economic Review, American Economic Association, vol. 61(2), pages 112-23, May.
- Hellmann, Thomas & Puri, Manju, 2000. "The Interaction between Product Market and Financing Strategy: The Role of Venture Capital," Review of Financial Studies, Society for Financial Studies, vol. 13(4), pages 959-84.
- Spiller, Pablo T, 1996. "Institutions and Commitment," Industrial and Corporate Change, Oxford University Press, vol. 5(2), pages 421-52.
- Sahlman, William A., 1990. "The structure and governance of venture-capital organizations," Journal of Financial Economics, Elsevier, vol. 27(2), pages 473-521, October.
- Hellmann, Thomas F. & Puri, Manju, 2000.
"Venture Capital and the Professionalization of Start-up Firms: Empirical Evidence,"
1661, Stanford University, Graduate School of Business.
- Thomas Hellmann & Manju Puri, 2002. "Venture Capital and the Professionalization of Start-Up Firms: Empirical Evidence," Journal of Finance, American Finance Association, vol. 57(1), pages 169-197, 02.
- Ron Martin & Peter Sunley, 2003.
"Deconstructing clusters: chaotic concept or policy panacea?,"
Journal of Economic Geography,
Oxford University Press, vol. 3(1), pages 5-35, January.
- Ron Martin & Peter Sunley, 2002. "Deconstructing Clusters: Chaotic Concept or Policy Panacea," ESRC Centre for Business Research - Working Papers wp244, ESRC Centre for Business Research.
- Armstrong, Mark, 2001. "The theory of access pricing and interconnection," MPRA Paper 15608, University Library of Munich, Germany.
- anonymous, 1981. "Communications," Management Science, INFORMS, vol. 27(12), pages 1465-1472, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.