This short essay examines the current conditions
in the US telecommunications sector. We examine the impact of
technological and regulatory change on market structure and business
strategy. Among others, we examine the impact on pricing of digitization
and the emergence of internet telephony. We briefly examine the
impact of the 1996 Telecommunications Act on market structure
and strategy in conjunction with the history of regulation and
antitrust intervention in the telecommunications sector. After
discussing the impact of wireless technologies, we conclude by
venturing into some short term predictions. We express concern
about the derailment of the implementation of the 1996 Act by
the aggressive legal tactics of the entrenched monopolists (the
local exchange carriers), and we point to the real danger that
the intent of Congress in passing the 1996 Act to promote competition
in telecommunications will not be realized.
Forthcoming, Business Economics, April 1998.
* Stern School of Business, New York, NY 10012, tel. (212) 998-0864, fax (212) 995-4218, e-mail: neconomi@stern.nyu.edu, www: http://www.stern.nyu.edu/networks/