The Role of Incentives for Opening Monopoly Markets: Comparing GTE and BOC Cooperation with Local Entrants

Author: Mini, Federico

Source: Journal of Industrial Economics, Volume 49, Number 3, September 2001 , pp. 379-414(36)

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Abstract:

While the 1996 Telecommunications Act requires all incumbent local telephone companies to cooperate with local entrants, section 271 of the Act provides the Bell companies but not GTE additional incentives to cooperate. Using an original data set, I compare the negotiations of AT&T, as a local entrant, with GTE and with the Bell companies in states where both operate. My results suggest that the differential incentives matter: The Bells accommodate entry more than does GTE, as evidenced in quicker agreements, less litigation, and more favorable prices offered for network access. Consistent with this, there is more entry into Bell territories.

Document Type: Original article

DOI: http://dx.doi.org/10.1111/1467-6451.00154

Affiliations: 1: Georgetown University and Autorità per le Garanzie nelle Comunicazioni, Servizio Analisi Economiche e di Mercato, Italy

Publication date: 2001-09-01