Fixed-Mobile 'Intermodal' Competition in Telecommunications: Fact or Fiction?

11 Pages Posted: 22 Apr 2004

See all articles by Lawrence J. Spiwak

Lawrence J. Spiwak

Phoenix Center for Advanced Legal & Economic Public Policy Studies

Date Written: March 31, 2004

Abstract

The purpose of this Policy Bulletin is to determine whether wireline and wireless telephone services are close enough substitutes to be effective intermodal competitors. Using the standard tools of antitrust economics, this Policy Bulletin presents evidence indicating that wireless is not an effective intermodal competitor to wireline telephone service - at least to the extent that wireless offers a meaningful constraint on the market power of a wireline monopoly. The lack of effective intermodal competition between fixed and wireless telephony suggests that efforts to promote intramodal competition (e.g., unbundling mandates) remain necessary because consumer savings in wireline telephony since the passage of the Telecommunications Act of 1996 - which are estimated to exceed $10 billion annually - are likely the result of intramodal competition between wireline carriers.

Keywords: Intermodal competition, telecommunications, fixed-wireless, substitutability

JEL Classification: K23, K21, L10, L22, L5, L43, L50, L51, L52

Suggested Citation

Spiwak, Lawrence J., Fixed-Mobile 'Intermodal' Competition in Telecommunications: Fact or Fiction? (March 31, 2004). Phoenix Center Policy Bulletin No. 10. Available at SSRN: https://ssrn.com/abstract=534023 or http://dx.doi.org/10.2139/ssrn.534023

Lawrence J. Spiwak (Contact Author)

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

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