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Regulation and the Vertically Integrated Firm: The Case of RBOC Entry into Interlata Long Distance

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  • Weisman, Dennis L

Abstract

Congress is considering telecommunications reform legislation that would allow the Regional Bell Operating Companies (RBOCs) to enter the interLATA long-distance market. A concern is that a vertically-integrated RBOC would be able to discriminate against its rivals. A proposed remedy would require the RBOCs to reduce their access market share as a precondition to interLATA entry. We show formally that such a precondition likely contributes to higher long-distance prices and enhances the risk of discrimination. Furthermore, the lower the share of access profits retained by an RBOC, the weaker are its incentives to lower long-distance prices. Copyright 1995 by Kluwer Academic Publishers

Suggested Citation

  • Weisman, Dennis L, 1995. "Regulation and the Vertically Integrated Firm: The Case of RBOC Entry into Interlata Long Distance," Journal of Regulatory Economics, Springer, vol. 8(3), pages 249-266, November.
  • Handle: RePEc:kap:regeco:v:8:y:1995:i:3:p:249-66
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