Business Separation in Telecommunications: Lessons from the U.S. Experience

Mark Jamison () and Sichter James
Additional contact information
Sichter James: University of Florida

Review of Network Economics, 2010, vol. 9, issue 1, 27

Abstract: Structural and functional separation of telecommunications operators is being considered in many parts of the world following the U.K. functional separation of BT into retail and network operations. The attractiveness of separation is understandable due to the problems regulators often experience when regulating a monopoly that is vertically integrated into competitive markets, but separation in practice rarely if ever lives up to its promises. We examine experiences with business separation in the United States to draw lessons about its effects. We consider the separation of local and long distance, separation between telecommunications and information services, and separation between wholesale networks and retail services. These experiences show that business separation lowers efficiency and delays innovation, that adapting separation rules to an ever changing industry is costly and creates controversies, that rivals try to gain strategic advantage through the regulatory process, and that behavioral rules can be more effective in facilitating competition and innovation than structural rules.

Keywords: functional separation; structural separation; telecommunications; divestiture; Computer Inquiry; long distance; Telecommunications Act of 1996 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.2202/1446-9022.1204 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

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:bpj:rneart:v:9:y:2010:i:1:n:3

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/rne/html

DOI: 10.2202/1446-9022.1204

Access Statistics for this article

Review of Network Economics is currently edited by Lukasz Grzybowski

More articles in Review of Network Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().