DBS systems : Perspectives from a profit seeking company

Considerable work has been reported on the tradeoffs associated with direct broadcast satellite (DBS) systems. These studies have considered total investment costs (space segment plus ground segment), but have not dealt with a number of other business-related parameters which affect system design. This article addresses some of these issues from the viewpoint of a commercial entity in the USA. It considers intial financing, short-term v long-term competitive advantages, system features v cost, effects of partially shifting the investment burden to the consumer, technology improvements, satellite constraints and economies of scale, flexibility, commercial alliances, and regulatory constraints. Examples are given to illustrate the tradeoffs involved and the effects of some of the factors.     

Different paths to universal access: The impact of policy and regulation on broadband diffusion in the developed and developing worlds

The authors examine the broadband digital divide by analyzing the impact of policy and regulation on broadband Internet diffusion. Their multiple regression analysis shows factors that determine broadband diffusion in technologically developed countries do not necessarily have the same impact in less developed countries. They show that in technologically developed countries, there is greater broadband diffusion in countries that make a higher financial investment in information and communication technologies (ICTs), have effective governing practices at the national level, have higher levels of education, and are more urban. In technologically developing nations, a competitive telecommunications sector and higher investment in ICTs lead to greater broadband diffusion, with investment having an even larger impact in the developing world than in the developed world. In addition, stronger democratic political institutions, higher levels of national income and lower levels of income inequality increase diffusion, but the presence of a national telecommunications regulatory authority has a negative impact. These results suggest that the path to widespread availability and use of broadband requires different strategies depending on a nation's level of technological development.     

The Political Economy of Price Cap Regulation

The last decade has witnessed a dramatic substitutionof price cap regulation for rate-of-return regulationin the telecommunications industry. The 1996Telecommunications Act empowers state regulators toset the terms of competitive entry in local telephonemarkets. We investigate whether the form of regulationendogenously affects the regulator's behavior withrespect to competitive entry. The evidence revealsthat regulators in price cap jurisdictions tend to setmore liberal terms of entry in comparison withregulators in rate-of-return jurisdictions. Thissuggests that price cap regulation suffers fromincomplete contracting, undermining the potentiallysuperior incentive properties of this importantregulatory reform.     

On the role of telecommunications in development

Numerous studies document the relationship between telecommunications and economic development. The main types and relative merits of these are summarized. The paper argues that more of the same will do little to help promote accelerated telecommunications investment in developing countries as needed. Rather, the efforts should now mainly concentrate on conveying existing sector knowledge to governments and international agencies. The paper focuses on examples of simple, proven tools which can be used to supplement telecommunications project analysis for this purpose.     

Electronic funds transfer: The creeping revolution

The much heralded ‘banking revolution’ has hitherto made steady rather than spectacular progress. This article focuses on the vanguard of the revolution, electronic funds transfer (EFT) and the growth and potential of automated clearing houses, automation in the branch and at point of sale, banking in the home, and for the corporate customer worldwide. While EFT developments will continue, the use of cash and the paper flow generated by cheques will still play an important role in banking systems.     

Telecommunications/ transportation substitution and energy conservation Part 2

Part 1 of this article reviewed existing research both on attitudes toward telecommunications substitution for travel and on operational experiments with teleconferencing and telecommuting. Part 2 examines major factors influencing substitution, including government policy. It concludes that government policy can significantly facilitate telecommunications substitution for travel and, indeed, the achievement of any real measure of substitution may depend upon proactive government policy. However, this is an unlikely prospect in the current US national policy environment.     

Satellite data networks for national development

This article assesses the telecommunications needs of developing countries and the possibility of using satellite communications to meet those needs. Three primary technological factors provide a guide to this application: small inexpensive satellite earth stations can provide a solution to the problem of limited ground facilities; satellites can operate in a broadcast and multiple acess mode as well as in a conventional point- to-point mode; and, the capacity required to support a single interactive digital terminal is about 1000 times less than that required to support a voice telephone and abput 1 000 000 times less than that required for video transmission. These factors lead to consideration of new forms of national networks based on satellites, microprocessors and small earth stations which do not follow the North American model. These new advanced forms of networks can co-exist with conventional voice networks, and can provide a realistic alternative for consideration by national telecommunications authorities.     

Changes in industry structure and technological convergence: implications for competition policy and regulation in telecommunications

The two leading US long-distance carriers—AT&T and MCI—have recently been acquired by two of the four major incumbent local exchange carriers—SBC and Verizon—and shortly thereafter, the new AT&T (SBC and the old AT&T) acquired BellSouth. Contemporaneously, alternatives to traditional voice communications provided by cable television and internet- based providers indicate a shifting of competition from a single voice market to the “triple play” of voice, video, and high-speed data. These developments imply a fundamentally different model of competition and industry structure than the one of “dominant firms” supplying essential inputs to new entrants for traditional voice service that was envisioned in the 1996 US Telecommunications Act, as implemented by Federal Communications Commission. In response to these developments, state governments, the FCC, and Canadian authorities have enacted legislative or regulatory changes that limit retail price regulation to services such as the basic residential telephone line. Approaches for assessing market power and other competitive issues that account for the specific characteristics of the emerging (converging) industry are also discussed. The paper concludes by describing the implications of the emerging nature of telecommunications competition for future ex ante and/or ex post regulation, market power assessment, continued regulation, and antitrust analyses.

Competition and Price Dispersion in International Long-distance Calling

This paper examines the relationship between changes in telecommunications provider competition on international long-distance routes and changes in prices. Overall, increased competition is associated with significantly lower prices to consumers of long-distance services. However, the relationship between competition and price varies according to the type of long-distance plan considered. For the plans frequently selected by price-conscious consumers, increased competition on a route is associated with lower prices. In contrast, for the basic international plans that are the default selection for consumers, increased competition on a route is actually associated with higher prices. Thus price dispersion appears to increase as competition increases. The views expressed in this paper are those of the author and not necessarily those of the OECD. I thank two anonymous referees, Joe Farrell, John Harkrider, Jim Lande, Bob Majure, Carl Willner and seminar participants at the FCC for their helpful comments. Special thanks for aid with data to Linda Blake, Mark Uretsky, Jim Lande, R.L. Smith and Carl Willner.     

‘Mainline’ telecommunications infrastructure, levels of development and economic growth: Evidence from a panel of developing countries

This paper assesses the growth impact of telecommunications infrastructure investment in developing countries by subjecting country-specific data on mainline tele-density and per capita growth to a Granger causality test within a panel cointegration framework. The results suggest that growth effects vary widely across country groupings reflecting different levels of development. Mainline tele-density and per capita growth strongly reinforce each other for countries that are relatively less developed. The reinforcement effect is even stronger for emerging countries that can be identified by their higher than average growth rates. In contrast, there is, at best, weak evidence of bi-directional causal links between the two variables for countries that are relatively more developed. These differences in the mainline tele-density and per capita growth relationships suggest that investment in telecommunications infrastructure, with its potential to generate high growth return, may serve as the critical tool for driving the growth and development process forward in the less developed countries.