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Bureaucrats as entrepreneurs: Do municipal telecommunications providers hinder private entrepreneurs

  • Hauge, Janice A.
  • Jamison, Mark A.
  • Gentry, Richard J.

We consider how government-owned enterprises affect privately owned rivals. Specifically, we compare the types of markets that municipally owned telecommunications providers in the United States serve to the types of markets that competitive local exchange carriers (CLECs) serve. We find that CLECs focus on potential profitability while municipalities appear to respond to other factors, such as political considerations or the desire to provide competition to incumbents. As a result, municipal providers tend to serve markets that CLECs do not. We also find that the presence of a municipal provider in a market does not affect the probability that a CLEC also serves that market. Our results suggest municipalities may not pose a significant competitive threat to CLECs and do not preclude CLEC participation.

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File URL: http://www.sciencedirect.com/science/article/B6V8J-4R68N7T-1/1/c3bbad7433ef8a087e67681c63a10041
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Article provided by Elsevier in its journal Information Economics and Policy.

Volume (Year): 20 (2008)
Issue (Month): 1 (March)
Pages: 89-102

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Handle: RePEc:eee:iepoli:v:20:y:2008:i:1:p:89-102
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505549

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  1. Geoff Edwards & Leonard Waverman, 2006. "The Effects of Public Ownership and Regulatory Independence on Regulatory Outcomes," Journal of Regulatory Economics, Springer, vol. 29(1), pages 23-67, 01.
  2. David Sappington & J. Sidak, 2003. "Incentives for Anticompetitive Behavior by Public Enterprises," Review of Industrial Organization, Springer, vol. 22(3), pages 183-206, May.
  3. Zolnierek, James & Eisner, James & Burton, Ellen, 2001. "An Empirical Examination of Entry Patterns in Local Telephone Markets," Journal of Regulatory Economics, Springer, vol. 19(2), pages 143-59, March.
  4. Garbacz, Christopher & Thompson, Herbert G, Jr, 2003. "Estimating Telephone Demand with State Decennial Census Data from 1970-1990: Update with 2000 Data," Journal of Regulatory Economics, Springer, vol. 24(3), pages 373-78, November.
  5. Trevor R. Roycroft, 2005. "Empirical Analysis of Entry in the Local Exchange Market: The Case of Pacific Bell," Contemporary Economic Policy, Western Economic Association International, vol. 23(1), pages 107-115, 01.
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