What It Was Like,What Happened,and What It's Like Now: Developments in Telecommunications Over Recent Decades

A survey of telecommunications over past decades. Overall prices of services have declined less rapidly since deregulation, with local rates rising, long-distance rates falling. Productivity increased strongly during period of Bell System regulated monopoly. Service quality of traditional telephone services has fallen, but many new services have been added. Innovations in customer premise equipment since deregulation far exceed those in prior years. Many major network innovations occurred during years of Bell System monopoly and network innovations have continued since. Actions by the Federal Communications Commission actions anteceded government antitrust case and are responsible for most of the changes since 1978. Most of the beneficial changes have little, if anything, to do with antitrust case and divestiture.     

The impact and politics of entry regulation on intrastate telephone rates

This paper examines the effects of regulatory barriers to the entry of the interstate long-distance carriers into the intraLATA toll service market. With these barriers, the local telephone companies can charge supracompetitive rates for intraLATA toll calls and use the excess revenues to price local exchange service below cost. We use a reduced form econometric price model to see whether these entry barriers have increased intraLATA toll rates. The results indicate that intraLATA toll rates in states that enjoin all types of long distance carriers from providing intraLATA service are about 7.5 per cent higher than in states that allow some sort of competition. In contrast, only preventing the entry of the largest facilities-based carriers does not affect intraLATA rates.     

An Analysis of the Welfare Effects of Long-Distance Market Entry by an Integrated Access and Long-Distance Provider

This paper discusses the welfare effects of entry by a vertically integrated access and long-distance service provider into the long-distance market. Using a stylized model of these markets, we conclude that substantial net consumer benefits arise when a vertically integrated firm is created by the entry of a LEC into the long-distance market, and these gains are mostly achieved from declines in supra-competitive profits received by long-distance incumbents. We find that these gains dominate losses in producer surplus that could arise even if integrated firm entry were to displace more efficient long-distance providers.     

电信企业的兼并、分拆和接入的规制

电信企业在不同的纵向结构和接入规制制度下表现出不同的行为和效率。在强制接入但接入费率不受规制的情况下,市话长话兼营结构下的长话资费比分离结构下的资费高。但在接入全面规制或完全市场化的情况下,兼营结构的效率较分离结构为高。在三种规制制度下,生产者的利润在分离结构下都比较高,而消费者却在兼营结构下得利较多。这些结论表明接入的规制应该跟产业政策和竞争政策结合起来考虑。本文还发现如果互联费率高于边际成本,那么网络经营者越多,市话资费可能会越高。     

Impact model for socially low tariffs in Zairian river transport

This article models the sequence of the effects of low tariffs in public river transport for goods. Within 10 years of deregulation, the public corporation had lost 83 per cent of its river traffic. The reasons for the inefficiency are made clear. The effects of low tariffs are examined, such as service rationing, overcharges, overcapacity and high budget claims, cost enhancement, and cross-subsidizing. The underlying objective is to formulate and apply an assessment method for transport policy that blends theories of rents and contestability in order to show how and why good intentions to boost demand by low tariffs in Zairian river transport produced very different results. Although illustrations are given for one mode of transport in one country, they are believed to be of much wider significance—to over 80 countries liberalizing their economies, including China, developing and east European countries. The National Transportation Authority (NTA, or Onatra) is a public corporation operating seaports, the Matadi–Kinshasa railway and an extensive network of river transportation 8,060 km long in the western half of Zaire. In the 1980s, it held monopolies on seaports and river ports, and shared the monopoly with the National Railway Authority (SNCZ) over the railways and the transport of mineral exports. The market in river transport appeared to be oligopolistic but it was dominated by the NTA. Since the NTA was one of the largest state-owned enterprises (SOEs), its experience is significant for many other SOEs and for the whole national economy. Ways to overcome inefficiencies are suggested, such as ending multiple public monopolies and cross-subsidies, privatization and deregulation.     

Regulating prices for shifting between service providers

The price that a regulated access provider charges for shifting customers between service providers has significant welfare implications. Typical regulatory approaches to pricing, such as pricing based on fully allocated cost or incremental cost, ignore the characteristics of consumer demand. A theoretical alternative, Ramsey pricing, considers only the elasticity of demand for given products. This paper directs attention to the competitive process. Using US long-distance telephone services as an example, this paper shows how empirical evidence concerning customer acquisition costs, customer switching costs, and churn among service providers can help to inform price regulation.     

Economic depreciation and the regulated firm under competition and technological change

Capital recovery is increasingly important to utilities, especially telephone companies, when technological change and competitive entry are occurring. In the absence of efficient capital recovery policies companies are going to see their equity eroded. In addition to losses by the companies there are likely to be losses to ratepayers in the form of reductions in service quality and higher rates in the future. To address the above problem this paper first reviews economic depreciation and capital recovery in the simple case of a regulated single product monopoly facing competitive entry. It employs the concept of economic depreciation to show how capital recovery policies will be front-loaded. It also develops the concept of the window of opportunity for capital recovery. There is a limited time for regulators to take remedial action, and if timely action is not taken there is no alternative but for the company to fail to recover some of its capital. These results are shown under both traditional rate of return and price caps.     

美国纳米计划管理预算及发展战略

布什政府把国家纳米计划（NNI）指定为多联邦机构参与研发的计划，旨在通过各机构间的经费、研发以及基础设施等方面的协调，使联邦政府对纳米的研发投入回报最大化。自布什2001年进驻白宫以来，美国联邦政府给国家纳米计划的投入从2001财年的4．534G美元增至2008财年11．674G美元（以2001年美元值计算），增长了158％。     

The evolving patterns of competition after deregulation: the relevance of institutional and operational factors as determinants of rivalry

In this research, we apply an ecological model of competition to analyze the effect of deregulation on within industry competitive patterns. Particularly, we identify organizational forms within the population according to two different perspectives: an operational one and an institutional one. We argue that deregulation influences the relative importance of each of these dimensions at determining the set of firms that can be considered direct competitors, and the intensity with which they compete. Our findings show that the use of these two perspectives is of utmost importance to understand the evolution of competition in contexts where deregulation takes place. As our arguments predict, we show that, during the regulated period, competition was based on institutional definitions of organizational forms. However, after deregulation, competition progressively focused on operational definitions of organizational form. Our findings confirm the relevance of deregulation at shaping competitive interdependences within an industry.     

Telecommunications Investment and Traffic in Developing Countries: The Effects of International Settlement Rate Reforms

In 1997 the FCC ordered sharp decreases in international settlement rates (bilaterally negotiated telecommunication rates) between the U.S. and other countries. Developing countries, which received about $35 billion in net settlement payments from U.S. carriers between 1985 and 1998, claim that payments finance telecom investment and that reduced rates, and therefore payments, will harm investment. Using a panel dataset of 179 countries from 1985–1998, I find settlement rates negatively correlated with international telecom traffic, suggesting that reduced rates will stimulate traffic. I also find no evidence that payments finance investment as measured by telephone penetration and telecommunications equipment imports.     

A $15 U.S. Minimum Wage: How the Fast-Food Industry Could Adjust Without Shedding Jobs

We consider the extent to which U.S. fast-food businesses could adjust to an increase in the federal minimum wage from its current level of $7.25 an hour to $15 an hour without having to resort to reducing their workforce. We consider this issue through a set of simple illustrative exercises, whereby the US raises the federal minimum wage in two steps over four years, first to $10.50 within one year, then to $15 after three more years. We conclude that the fast-food industry could absorb the increase in its overall wage bill without resorting to cuts in their employment levels at any point over this four-year adjustment period. We find that the fast-food industry could fully absorb these wage bill increases through a combination of turnover reductions, trend increases in sales growth, and modest annual price increases over the four-year period. Working from the relevant existing literature, our results are based on a set of reasonable assumptions on fast-food turnover rates, the price elasticity of demand within the fast-food industry, and the industry’s underlying trend for sales growth. We also show that fast-food firms would not need to lower their average profit rate during this adjustment period.     

Competition and the price of municipal cable television services: An empirical study

This paper investigates the effect of competition in the provision of cable television services on social welfare. We develop a simple theoretical model that suggests that competition will be welfare enhancing so long as it results in lower market prices. We empirically test for the presence of this condition by estimating a five equation system: First, the local franchising authority is viewed as self-selecting into a competitive or non-competitive environment in order to maximize its rents. Given this selection, the remaining four equations specify basic service and pay service penetration rate and price equations. Following Mayo and Otsuka (1991), the resulting system is estimated by two-stage least squares. We find that competition among suppliers lowers average basic cable rates by about $3.85 and the typical pay service rate by about $1.10, certis paribus. Mutatis mutandis estimates of these effects imply that monopoly franchising of cable service results in roughly $3.6 billion per year national welfare loss.     

Barriers to entry, deregulation and workplace training: A theoretical model with evidence from Europe

We study the impact of regulatory barriers to entry on workplace training. We develop a model of training in imperfectly competitive product and labour markets. The model indicates that there are two contrasting effects of deregulation on training. As stressed in the literature, with a given number of firms, deregulation reduces the size of rents per unit of output that firms can reap by training their employees. Yet, the number of firms increases following deregulation, thereby raising output and profit gains from training and improving investment incentives. The latter effect prevails. In line with the predictions of the theoretical model, we find that the substantial deregulation in the 1990s of heavily regulated European industries (energy, transport and communication) increased training incidence.     

Quantity,quality and the welfare effects of US airline deregulation

In this paper we employ a method for estimationg quality-adjusted demand to calculate measures of the change in consumer suruplus due to US airline deregulation. The quality-adjusted estimates of the price elasticity of demand indicate that consumers are from 25% to 50% more sensitive to changes in air fares than unadjusted estimates would suggest. Changes in unadjusted consumer surplus overstate the net welfare gains from deregulation by roughly a factor of two, strongly suggesting that adjustments for quallity of service are essential to welfare analysis of regulatory changes in this industry     

Technological Change Bias In The U.S. Investor-Owned Electric Utility Industry Following Potential Deregulation

This paper estimates regulated and poientially deregulated costs of production for a multiproduct electric utility industry. The empirical evidence suggests technological regression with respect to costs in both regulated and deregulated environments. Analysis of factor cost shares indicates that technological change in a deregulated environment is expected to be less apital saving than technological change in the regulated environment. In addition, this study finds that overall diseconomies of scale may be nduced over time and to a greater extentunder deregulation than under regulation. Also, cost complementarities may be enhancedover time, but to a lesser extent under deregulation. Hence. tendencies toward natural monop oly may be increased or decreased by deregulation, and advancing deregulation may or may not be an appropriate policy.     

Differential Effects of Rail Deregulation on US Grain Producers

The efficiency benefits of US rail industry deregulation have been widely documented. This research provides new insight regarding the accrual of benefits within the US grain industry. A study of rail grain rates from 1980 to 2000 finds railroads decreased rates for all grain shippers. The greatest gain in benefits was to producers in the most competitive market environments. Regions and products with less competitive transportation markets will become increasingly disadvantaged if the trend continues. Rail rates are a key determinant in grain market viability and producer profitability in these rail dominated markets.     

Internal trade,productivity and interconnected industries: A quantitative analysis

Does trade within a country affect welfare and productivity? What are the magnitude and consequences of costs to such trade? To answer these questions, we exploit unique Canadian data to measure internal trade costs in a variety of ways—they are large and vary across sectors and provinces. To quantify their consequences for welfare and productivity, we use a recent multi‐sector trade model featuring rich input–output relationships. We find interprovincial trade is an important contributor to Canada's GDP and welfare, though there are significant costs to such trade. Reducing interprovincial trade costs by 10% yields aggregate gains of 0.9%; eliminating our preferred estimates of costs, gains average between 3% and 7%—equivalent to real GDP gains between $50 billion and $130 billion. Finally, as policy reforms are often sector specific, we liberalize sectors one at a time and find gains are largest in highly interconnected industries.     

Economics of compatibility standards and competition in telecommunication networks

The pro- and anti-competitive implications of technical compatibility standards are introduced in general terms and then applied to current issues in telecommunications policy. The demand and supply for standards under regulated monopoly and the transition to deregulation and competitive entry create a tradeoff between the traditional goal of achieving positive externalities from interconnection and the alternative goal of providing enhanced service offerings that may involve sacrificing universal connectivity. We argue that this tradeoff has affected the utilization of data communication networks in the U.S. and Europe. In addition, we identify problems of competing interests that complicate the European approach to standards “harmonization” in the case of telecommunications. We conclude by noting that the nature of standards and standard-setting process can have marked effects on the incentives to conduct private research and development.     

Cellular phones in Mozambique: Who has them and who doesn't?

Cellular phones are considered one of the success stories of contemporary technology diffusion: there are three billion cellular telephones globally, and just over six billion people. This article describes the distributional boundary of the cellular telephone enterprise, as we see it in data from Mozambique. A telephone survey of mobile phone users there revealed that men outnumbered women, especially at higher levels of service and that most were urban, with a particular concentration in the capital city. Thus while pre-paid telephone plans have made basic cellular service affordable to many Mozambicans, the lack of rural infrastructure stills puts access out of the reach of a majority. In addition, pre-paid users pay more per minute for their service—probably not a fair situation for the poor families that tend to take this route to telecommunications.