Incumbent and Entrant Incentives with Network Interconnection: The Case of US Telecommunications

35 Pages Posted: 16 Apr 2009

See all articles by Mark A Jamison

Mark A Jamison

University of Florida - Warrington College of Business Administration, Public Utility Research Center

Date Written: 2001

Abstract

I examine how incumbents and entrants respond to prices for network interconnection in telecommunications. I find that low prices for entrants to lease incumbents’ facilities, exchange traffic, and buy incumbents’ services for resale increase entry. However, if prices for leasing incumbents’ facilities are low relative to incumbents’ retail prices, then less entry occurs, presumably because incumbents hinder entry to protect profits. Higher prices for exchanging traffic increase entrants’ market share, presumably because they target customers (such as Internet Service Providers) who receive more calls than they make. Low prices for reselling services do not cause entrants to choose reselling over other supply methods.

Suggested Citation

Jamison, Mark A., Incumbent and Entrant Incentives with Network Interconnection: The Case of US Telecommunications (2001). Available at SSRN: https://ssrn.com/abstract=1381462 or http://dx.doi.org/10.2139/ssrn.1381462

Mark A. Jamison (Contact Author)

University of Florida - Warrington College of Business Administration, Public Utility Research Center ( email )

PO Box 117142
Gainesville, FL 32611
United States
352-392-6148 (Phone)
352-392-7796 (Fax)

HOME PAGE: http://warrington.ufl.edu/purc/facultyinfo.asp?WEBID=1217

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