International Telecom Settlements: Gaming Incentives, Carrier Alliances and Pareto‐Superior Reform

David A. Malueg and Marius Schwartz

Journal of Industrial Economics, 2001, vol. 49, issue 3, 335-377

Abstract: Liberalized countries that allow competition in international telecommunications favor traffic re‐routing practices as arbitrage against foreign monopolists. This view is seriously incomplete. Monopolists, allied with carriers in liberalized countries, can use these practices to reduce termination payments to nonalliance carriers??thereby harming also consumers in liberalized countries??by gaming regulations that require equal termination rates at both ends and ‘proportional return’ (the monopolist’s traffic is allocated among carriers in proportion to their shares of traffic to its country). We also present a simple bilateral settlements reform that eliminates gaming incentives and other proportional‐return distortions, yet benefits both countries.

Date: 2001
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1111/1467-6451.00153

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jindec:v:49:y:2001:i:3:p:335-377

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0022-1821

Access Statistics for this article

Journal of Industrial Economics is currently edited by Pierre Regibeau, Yeon-Koo Che, Kenneth Corts, Thomas Hubbard, Patrick Legros and Frank Verboven

More articles in Journal of Industrial Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().