Competition in telecommunications / Jean-Jacques Laffont and Jean Tirole

The book analyzes regulatory reform and the emergence of competition in network industries using the state-of-the-art theoretical tools of industrial organization, political economy and the economics of incentives. The following sections focus on four central aspects of the recent deregulatory movement: the introduction of incentive regulation; one-way access (access given by a local network to the providers of complementary services); the special nature of competition in an industry requiring two-way access (whereby competing networks depend on the mutual termination of calls); and universal service, in particular the two leading contenders for the competitively neutral provision of universal service: the use of engineering models to compute subsidies and the design of universal service auctions. The book concludes with a discussion of the Internet and regulatory institutions.