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Handbook of Telecommunications Economics: Structure, Regulation and Competition
Handbook of Telecommunications Economics: Structure, Regulation and Competition
TELECOMMUNICATIONS
ECONOMICS
VOLUME 1
STRUCTURE, REGULATION AND COMPETITION
Edited by
MARTIN E. CAVE
University of Warwick
SUMIT K. MAJUMDAR
Imperial College of Science, Technology and Medicine
University of London
and
INGO VOGELSANG
Boston University
2002
ELSEVIER
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SECTION I - STRUCTURE
Chapter 2
Historical Overview
G E R A L D W. B R O C K
1. Introduction
2. Development of Regulated M o n o p o l y Telecommunication
2.1. The Early Telegraph and Telephone Industry
2.2. Regulation and Monopoly
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Content.
Chapter 3
Network Effects
S T A N L E Y J. L I E B O W I T Z and S T E P H E N E. M A R G O L I S
1. Network Externalities
2. Classifications
3. Impacts of Network Effects
3.1. Choosing Network Size
3.2. Choosing Among Competing Networks
4. Features of M o d e r n N e t w o r k Effects Models
5. The Empirical Importance of N e t w o r k Effects
5.1. Network Effects in Principle
5.2. Measuring Network Effects
6. Policy Implications
7. Conclusions
References
Chapter 4
Customer D e m a n d Analysis
LESTER D. TAYLOR
1. Introduction
2. Telecommunications D e m a n d Analysis in the 1970s and 1980s
3. The General N a t u r e of Telecommunications D e m a n d
4. Theoretical Considerations
4.1. A Generic Model of Access Demand
4.2. Models of Toll Demand
4.3. Point-to-Point Toll Demand
5. Empirical Studies
5.1. Studies of Residential Access Demand and Local Usage;
Residential Access Demand: Taylor and Kridel, 1990
5.2. Bypass via EAS: Kridel, 1988
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2.5. Network Optimization in the Interoffice and Intercity Networks
3. Network Facilities and Technologies
3.1. Wireline Subscriber Access
3.2. Alternative Subscriber Access Technologies
3.3. Switching
3.4. Interoffice Transport Facilities
3.5. Interconnection Arrangements and Costs
3.6. Broadband Standards and Technologies
4. Cost Proxy Models of the Telecommunications N e t w o r k
4.1. A Brief Survey of Cost Proxy Models in Telecommunications
4.2. The Hybrid Cost Proxy Model
4.3. International Applications of HCPM
4.4. Cost Proxy Models as a Tool for Applied Empirical Analysis
5. Conclusion
References
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SECTION II - REGULATION
Chapter 7
Price Regulation
D A V I D E. M . S A P P I N G T O N
1. Introduction
2. F o r m s of Incentive Regulation
2.1. Banded Rate of Return Regulation
2.2. Earnings Sharing Regulation
2.3. Revenue Sharing Regulation
2.4. Rate Case Moratoria
2.5. Price Cap Regulation
2.6. Partial Deregulation
2.7. Yardstick Regulation
2.8. Options
3. Trends in Incentive Regulation
4. General Issues in the Design and Implementation
of Incentive Regulation
4.1. Reasons for Incentive Regulation
4.2. Incentive Regulation in Practice
4.3. Possible Drawbacks to Incentive Regulation
5. Designing Price C a p Regulation
5.1. Setting the X Factor
5.2. Determining the Length of Time Between Reviews
5.3. Mid-Stream Corrections: Z Factors
5.4. Implementing the Price Cap Constraint
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Chapter 8
The Theory of Access Pricing and Interconnection
MARK ARMSTRONG
1. Introduction
2. One W a y Access Pricing
2.1. The Effect of Unbalanced Retail Tariffs
2.2. The Problem of Foreclosure in an Unregulated Market
2.3. Fixed Retail Prices with No Bypass: The ECPR
2.4. Fixed Retail Prices and Bypass
2.5. Ramsey Pricing
2.6. Unregulated Retail Prices
2.7. Introducing Dynamic Issues
2.8. Controversies and Conclusions
3. Competitive Bottlenecks
3.1. Mobile Call Termination
3.2. Access Charges for the Internet
4. Two W a y Access Pricing and Network Interconnection
4.1. Fixed Subscriber Bases: International Call Termination
4.2. Interconnection with Competition for Subscribers
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Chapter 12
Competition in the Long Distance M a r k e t
D A V I D L. K A S E R M A N and J O H N W. M A Y O
1. Introduction
2. Structure - Conduct-Performance
2.1. Structure
2.2. Conduct
2.3. Performance
2.4. Summary
3. Empirical Analysis of Relaxed Regulation
4. The Access Charge Pass T h r o u g h Debate
4.1. Theoretical Issues
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Chapter 13
Mobile Telephone
JERRY HAUSMAN
1. Introduction
2. Description of the Mobile Industry
2.1. Technology
2.2. Competing Firms and Countries
2.3. Government Frequency Allocation
3. International Comparisons
3.1. Performance Across Countries
3.2. Pricing Within the U.S.
3.3. Pricing in Europe
4. Increased Consumer Welfare from Mobile Telephone
4.1. Economic Theory to Measure Increased Consumer Welfare
4.2. Estimation of the Amount of Increased Consumer Welfare
4.3. Estimation of a Corrected Telecommunications Service CPI
5. Government Regulation of Mobile Telephone
5.1. Estimation of the Cost of Regulatory Delay in the U.S.
5.2. Regulation of Mobile Prices
5.3. Regulation of Mobile Access and Mandated Roaming
5.4. Regulation of Wireline Call Termination on Mobile
6. Taxation of Mobile Services
6.1. Estimation of Economic Efficiency Losses
6.2. Comparison with Alternative Taxes
7. Conclusion
References
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Chapter 14
Spectrum Auctions
PETER CRAMTON
1. Introduction
2. W h y Auction the Spectrum?
3. Auction Design
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Chapter 15
Local Network Competition
G L E N N A. W O R O C H
1. Introduction
1.1. Scope and objectives of this chapter
1.2. Patterns and themes
2. Local Network Competition in Historical Perspective
2.1. Local competition in one city, a century apart
2.2. U.S. experience with local competition and monopoly
2.3. The experience abroad
3. Economic Conditions of Local N e t w o r k Competition
3.1. Defining local services and markets
3.2. Demand for local network services
3.3. Cost of local service and technical change
4. The Structure and Regulation of the Local Network Industry
4.1. Structure of the U.S. local exchange industry
4.2. Regulation of local network competition
5. Strategic Modelling of Local Network Competition
5.1. Causes and consequences of local network competition
5.2. Strategic choices of local network entrants
5.3. Strategic models of local network competition
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Contents of Volume I
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Subject Index
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