The Economic Logic for Conditioning Bell Entry into Long Market Distance on the Prior Opening of Local Markets

Marius Schwartz

Working Papers from U.S. Department of Justice - Antitrust Division

Abstract: One of the most important and most contentious issues for regulation and competition raised by the 1996 Telecommunications Act is when to authorize the regional Bell companies to offer long-distance services. The Department of Justice (DOJ) adopted a standard requiring that a Bell's local market must first be irreversibly open to competition. This paper analyzes the competitive benefits and costs of authorizing Bell entry, explains the DOJ's standard, and argues that the incentives created by this standard will help achieve the Act's competitive goals more efficiently and rapidly than other standards, ultimately reducing the need for intrusive regulation.

Keywords: COMPETITION; LICENCES; MARKET STRUCTURE; TELECOMMUNICATIONS (search for similar items in EconPapers)
JEL-codes: L96 D45 D40 L13 L14 (search for similar items in EconPapers)
Date: 2000
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