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Antitrust issues concerning R&D cross-subsidization : A case study of US telecommunications

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  • Rao, P. M.
  • Klein, Joseph A.

Abstract

This article examines the treatment of cross-subsidization under the antitrust laws in the context of a US telecommunication service industry that is regulated and characterized by rapidly changing technology and significant R&D expenditures. With particular reference to the divested Bell operating companies under the Modification of Final Judgment, the article focuses on cross-subsidy concerns that would flow from the funding of R&D by a regulated firm if it were affiliated with unregulated entities. The article suggests an economic-based analytical framework, and possible remedies against potential anticompetive effects, as a substitute for automatic application of legal presumptions of abuse of market power.

Suggested Citation

  • Rao, P. M. & Klein, Joseph A., 1992. "Antitrust issues concerning R&D cross-subsidization : A case study of US telecommunications," Telecommunications Policy, Elsevier, vol. 16(5), pages 415-424, July.
    • Handle: RePEc:eee:telpol:v:16:y:1992:i:5:p:415-424
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    Cited by:

    1. Zhijun Chen & Patrick Rey, 2019. "Competitive cross‐subsidization," RAND Journal of Economics, RAND Corporation, vol. 50(3), pages 645-665, September.

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