Recent Empirical Evidence on Discrimination by Regulated Firms
affiliation not provided to SSRN
Michael R. Ward
University of Texas at Arlington - College of Business Administration - Department of Economics
Review of Network Economics, Vol. 1, March 2002
Well-established economic principles show that regulated monopolies may have an incentive to act discriminatorily against rivals of their unregulated affiliates. This paper discusses some recent empirical evidence regarding discrimination in telecommunications. Specifically, it surveys anecdotal and systematic evidence that LECs discriminate against unaffiliated providers of mobile telephony. Evidence regarding discrimination by LECs against rival local phone companies is also discussed. At the same time, the evidence suggests that allowing LECs to enter cellular telephony may result in higher-quality or lower-cost cellular phone provision. These findings provide evidence that discrimination is a real phenomenon, and that there is a policy trade-off between preventing discrimination (by mandating separation) and realizing economies of scope.
Number of Pages in PDF File: 15
Keywords: non-price discrimination, cellular telephones, regulated industries, empirical evidence
JEL Classification: L96, D42, L51Accepted Paper Series
Date posted: February 14, 2003
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