A New View of Scale and Scope In the Telecommunications Industry: Implications for Competition and Innovation

COMMUNICATIONS & STRATEGIES is an international journal that aims to publish peer-reviewed papers focusing on the industry's key issues and offering a forum for the finest socio-economic analysis of the telecoms, IT and audiovisual sectors. www.comstrat.org

19 Pages Posted: 9 Apr 2007  

alain Bourdeau de Fontenay

affiliation not provided to SSRN

Jonathan Liebenau

London School of Economics & Political Science (LSE) - Department of Management

Brian Savin

Columbia Business School - Institute for Tele Information

Abstract

Telecommunication economic analysis has largely relied upon a conventional economic framework that has its roots in neoclassical analysis that emerged almost a hundred years ago, and has contributed to reshaping the direction of economic policies by attacking the premises of the 1996 Telecommunications Act, and providing far greater leeway to incumbents, as well as challenging the economic efficiency of new entrants. Common approaches based upon a large number of simplifying assumptions that include, for instance, the idea that the technology is exogenous. Such hypotheses make little sense at a conceptual level. In addition, this idea is largely contradicted by the short period during which the sector achieved some level of competition around the 1900's and 2000. Not only have economists not thought about any number of such hypotheses, but they have also failed to consider how they might have an impact on their analysis. Evaluating a number of such issues in this paper, we are able to show how conventional economic analysis, uncritically applied to the sector, contributed to the undoing of the 1996 Telecommunications Act and of much of the competition it helped facilitate.

Keywords: scale and scope, competition, telecommunications industry structure

JEL Classification: L96,L90,K23,L43

Suggested Citation

Bourdeau de Fontenay, alain and Liebenau, Jonathan and Savin, Brian, A New View of Scale and Scope In the Telecommunications Industry: Implications for Competition and Innovation. COMMUNICATIONS & STRATEGIES is an international journal that aims to publish peer-reviewed papers focusing on the industry's key issues and offering a forum for the finest socio-economic analysis of the telecoms, IT and audiovisual sectors. www.comstrat.org. Available at SSRN: https://ssrn.com/abstract=978728

Alain Bourdeau de Fontenay (Contact Author)

affiliation not provided to SSRN ( email )

Jonathan Liebenau

London School of Economics & Political Science (LSE) - Department of Management ( email )

United Kingdom

Brian Savin

Columbia Business School - Institute for Tele Information ( email )

3022 Broadway
New York, NY 10027
United States

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