Article Abstract:
The history of the telecommunications industry has demonstrated that public policy delays market releases of new technology. At present, the sector is in the midst of its third revolution, the convergence of video, computers and telephony into a wireless technology, an event which requires a different public policy response to ensure that its contribution to the national income will be optimized. To this end, the Modified Final Judgment and other mechanisms underlying US telecommunications policy will have to be superseded by new public institutions.
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Article Abstract:
The FCC's regulation of switched access prices to recover allocated fixed costs leads to the Brandon effect or a downward sloping of the industry supply curve for switched access. It is shown that the amount of switched access purchased by long distance firms determines their 'monopsony' or the difference between their marginal cost and factor price. Monopsony power, when switched access is priced above its marginal cost, reduces or offsets the extent of efficiency-reducing factor substitution.
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Article Abstract:
European telecoms are examined for 1989-1993, and British and French utilities have achieved the best performance in terms of productivity. Output prices dropped for British Telecommunications. Competition appears to affect price levels, though efficiency can be boosted through incentive regulation.
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