Designing Competition Policy for Telecommunications

Robinson Glen O. and Weisman Dennis L. ()
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Robinson Glen O.: University of Virginia
Weisman Dennis L.: Kansas State University

Review of Network Economics, 2008, vol. 7, issue 4, 38

Abstract: This paper explores the role of the essential facilities doctrine in circumscribing the scope of network sharing obligations in telecommunications. Among other things it argues that a proper application of the doctrine of essential facilities should recognize the prominence of dynamic over static efficiency in promoting consumer welfare. Regulators may be averse to recognizing these tradeoffs because unlike the behavior of prices the welfare losses from foregone innovation may be unobservable to the regulators' constituency. Moreover, an emphasis on dynamic efficiency requires the short-term regulator to take the "long view" - fostering the competitive process rather than emulating the competitive outcome.

Date: 2008
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DOI: 10.2202/1446-9022.1160

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