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Excessive(?) Entry of National Telecom Networks, 1990-2001

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Abstract

We document entry and capacity expansion in US long-distance fiber-optic networks before and during the “telecom boom.” We disentangle the many swaps and leases between networks in order to measure owned route miles versus route miles shared with other carriers. Entry appears much more moderate when these shared miles are not counted. Preemption strategies can lead to excessive entry, and we find evidence for preemptive behavior regarding total miles (including swaps and leases) but less for preemption regarding owned miles. We conclude that entry was excessive only with regard to swaps and leases, but not with regard to the physical building of the networks.

Suggested Citation

  • Christiaan Hogendorn, 2003. "Excessive(?) Entry of National Telecom Networks, 1990-2001," Working Papers 03-07, NET Institute.
    • Handle: RePEc:net:wpaper:0307
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    Cited by:

    1. Germán Gutiérrez & Thomas Philippon, 2017. "Declining Competition and Investment in the U.S," NBER Working Papers 23583, National Bureau of Economic Research, Inc.
    2. Germán Gutiérrez & Callum Jones & Thomas Philippon, 2019. "Entry Costs and the Macroeconomy," NBER Working Papers 25609, National Bureau of Economic Research, Inc.
    3. Shane Greenstein, 2006. "Innovation and the Evolution of Market Structure for Internet Access in the United States," Discussion Papers 05-018, Stanford Institute for Economic Policy Research.

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    More about this item

    Keywords

    telecommunications; investment; preemption;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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