Excessive(?) Entry of National Telecom Networks, 1990-2001

NET Institute Working Paper No. 03-7

33 Pages Posted: 29 Aug 2004

See all articles by Christiaan Hogendorn

Christiaan Hogendorn

Wesleyan University - Department of Economics

Date Written: July 2004

Abstract

We document entry and capacity expansion in US long-distance fiber-optic networks before and during the "telecom boom." We disentangle the many swaps and leases between networks in order to measure owned route miles versus route miles shared with other carriers. Entry appears much more moderate when these shared miles are not counted. Preemption strategies can lead to excessive entry, and we find evidence for preemptive behavior regarding total miles (including swaps and leases) but less for preemption regarding owned miles. We conclude that entry was excessive only with regard to swaps and leases, but not with regard to the physical building of the networks.

Keywords: telecommunications, investment, preemption

JEL Classification: L11, L13, L96

Suggested Citation

Hogendorn, Christiaan, Excessive(?) Entry of National Telecom Networks, 1990-2001 (July 2004). NET Institute Working Paper No. 03-7. Available at SSRN: https://ssrn.com/abstract=584821 or http://dx.doi.org/10.2139/ssrn.584821

Christiaan Hogendorn (Contact Author)

Wesleyan University - Department of Economics ( email )

238 Church Street
Middletown, CT 06459-0007
United States
860-685-2108 (Phone)
860-685-2301 (Fax)

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