Bridger M. Mitchell

Markup Pricing for Interconnection: A Conceptual Framework

Profound changes in technology and the rapid growth in telecommunications markets have created conditions in which production of most telecommunications services by competitive suppliers can now be presumed to be little, if any, more costly than monopoly production. In these circumstances, the earlier goal of regulation—to protect consumers against monopoly exploitation—should be replaced by the goal of fostering conditions favorable to competition and encouraging efficient markets. As liberalization of the telecommunications sector proceeds, regulatory involvement in telecommunications markets should be reduced to the minimum activities necessary to ensure that those markets are competitive.

Technological Change and the Electric Power Industry: Insights from Telecommunications

This paper examines key parallels and differences between the electric utility and telecommunications industries with respect to the role played by new technology, and the particular prospects for electric power distributed resources (DR) in the electric utility industry. Technological change influences industry structure and affects regulatory policy. The paper explores how these dynamics play out in the transition from an industry characterized by vertical integration, natural monopoly, and cost-of-service regulation, to one exhibiting rapidly increasing product/service differentiation, market entry, as well as competition, new technology, and the evaporation of traditional economies of scale. The paper draws from the literature on technological innovation and industry structure, and builds on the premise that the competitive structure and dynamics of an industry reflect underlying product and process technologies.