Competition and Bell Company Investment in Telecommunications Plant: The Effects of Une-P

16 Pages Posted: 17 Feb 2004

See all articles by Lawrence J. Spiwak

Lawrence J. Spiwak

Phoenix Center for Advanced Legal & Economic Public Policy Studies

Date Written: September 17, 2003

Abstract

After a brief discussion on expected and actual investment behavior in the telecommunications industry after the 1996 Act, an econometric model is used to quantify the relationship between UNE-P competition and Bell Operating Company investments in telecommunications plant. Using publicly-available Federal Communications Commission data, a positive relationship between UNE-P competition and BOC average net investment is found. According to the model, each UNE-P access line increased BOC average net investment by $759 per year, or about 6.4% per year in the aggregate. While BOC net investment fell by about 7% in 2002, investment dollars were more heavily allocated to states with greater levels of UNE-P competition, and this additional investment offsets the total decline in investment by about 50%.

Keywords: Telecommunications, competition, unbundling, investment

JEL Classification: K23, L10, L50, L96, O33, 038

Suggested Citation

Spiwak, Lawrence J., Competition and Bell Company Investment in Telecommunications Plant: The Effects of Une-P (September 17, 2003). Phoenix Center Policy Bulletin No. 5. Available at SSRN: https://ssrn.com/abstract=503302 or http://dx.doi.org/10.2139/ssrn.503302

Lawrence J. Spiwak (Contact Author)

Phoenix Center for Advanced Legal & Economic Public Policy Studies ( email )

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